___________________________________________________________________________

2010/TEL41/LSG/IR/002 Agenda Item: 3

Deploy Broadband Networks for the Rising Bandwidth Demands

Purpose: Information

Submitted by: Chinese Taipei

Industry Roundtable: National Broadband Networks and Fibre to the Premises Chinese

Taipei6 May 2010

CHT Proprietary

Dr. San-Wei Sun

Deputy Managing Director

Corporate Planning Department

Chunghwa Telecom

May. 6, 2010

Deploy Broadband Networks for

the Rising Bandwidth Demands

CHT Proprietary

Agenda

Broadband profile and progress in Chinese Taipei

CHT’s network deployment for Broadband

Prepare for the future

Concluding Remarks

1

CHT Proprietary

Source: FTTH Council, Dec. 2009

Profile of Broadband Island

FTTH(>100 Mbps) Population: 23,131,093

Area: 35,980 sq km

Household: 7,835,375

(source: TWNIC & Telegeograph)

357.1(E)

169.5

230.2

331.3

235.1

186.4

-

50

100

150

200

250

300

350

400

2002 2003 2004 2005 2006 20072008 2009

Gbps

Telegeography

TWNIC

Average download speed up from 0.6Mbps(‘02) to >5.1Mbps (‘09)

BB household online 64%

Regular Internet users upto 11Million

FTTx household penetration ranked #4 among Economy

International internet BandWidth

2

CHT Proprietary

Growth Enablers: Competition, x-Taiwan Programs, …

3

電信加值服務

WiMAX執照通信傳播

管理法草案電信三法電信總局中華電信

行動業務

固網業務

3G執照通信傳播基本法

國家通信傳播委員會

號碼可攜

1989

1996

1997

2000

20022004

2005

2006

2007

註：本公司於2005年8月12日完成民營化

Item Target Item 2008 2009 2010 2011 2012 2013 2014 2015 2016

Wireless

Broadband &

Convergence

Network

Fixed

Broadband

(>50M)

Coverage 70%

Bandwidth 30M 30M 30M 30M 30M 50M 50M 50M 50M

Coverage 45% 55% 65% 75% 80% 50% 58% 65% 70%

Broadband network coverage targets

CHT Proprietary

Milestones for ICT Development in Chinese Taipei

NII Driving Plan

e-Government Plan

National ICT Development Plan

(2002~2006)

National ICT Development Plan

(2007~2011)

1998 99 2000 01 02 03 04 05 06 07 08 09 10 11 12

1.e-Government2.e-Industry3.ICT Infrastructure

e-Taiwan Project

M-Taiwan Project

Digital Content Driving Plan

e-Learning Driving Plan

u-TaiwanSummary of the 26th STAG Board Meeting

1.Mobile Communication Buildup

2.Deepen ICT Applicationi-T

aiwan

upgradeupgrade

e-Industry Driving Plan

Source: NICI, 2008/9

4

CHT Proprietary

Agenda

Broadband profile and progress in Chinese Taipei

CHT’s network deployment for Broadband

Prepare for the future

Concluding Remarks

5

CHT Proprietary

ADSL: 2.66 Million,

FTTx: 1.64million,

Cable: 0.81million (Dec. 2009)

Operator’s Concerns – to deliver new value to customers with new revenue

to offset the decoupling, to justify the network Capex/Opex…

Source: Unstrung

6

VDSL(>10 Mbps)

ADSL(>2 Mbps)

Modem(>56 kbps)

Mobile

Fixed

3G(> 384 kbps)

GPRS(>144 kbps)

GSM(> 56 kbps)

Which Screen&Wire?

(CAGR ~300%)

CHT Proprietary

Others

VAS: SMS MMS JAVA Game Ring Back Tone Mobile internet Mobile TV

2G GSM

2.5G GPRS

3G WCDMA

3.5G HSDPA

VAS:

IPTV (MOD)

Xuite

hiGame

hiChannel

hiStock

hiB2B

hiAD

hiMusic

Chunghwa Telecom - an incumbent, privatized, integrated Operator

Local Service

DLD

ILD

CHT

Fixed-line(12.4M subs, 97%)

Mobile(9.2M subs, 35%)

Internet

& Data

Broadband Access (4.3M, 83%)

ADSL

WLAN

FTTx

Internet Services (ISP) HiNet (4.1M subs, 72%)

(backbone BW＞1Tbps)

Business Intranet X.25 \ ATM \ FR

IPVPN

Leased Line

% (market share) As of Dec. 2009

Handsets sale

Billing handling services

7

Revenue 184Bn NT$ (2009)

Evolve to a ICT value-creating company

Oversea Offices & Subsidiaries:US, China, Japan, Singapore, Vietnam, Thailand, Hong Kong …

Global presence: 27 PoPs in Asia, 3 PoPs in Europe, 11 PoPs in US

Core Business

CHT Proprietary

Access aggregation

Network

Regional aggregation

Network

HiNet

Other ISP

AGG-C (L3SW)

Other ISP

Agg.

Node

POP

POP

POP

FTTx

xPON/FOT

xDSL

Access Node

PC ONU/MDU

VDSL DSLAM

/MSAN

OLT/FOT

AGG-E(L2SW)

POIATM

(STM-1/DS-3)xDSL

ATM SWDSLAM

POP

STM-1 (STM-1/DS-3)

GbE

Transport Network (NG-SDH/Fiber)

HiNet/NGN_CN Network

PC xTU-R

PC xTU-R

PC ATU-R

NG-SDH/Fiber

NG-SDH/Fiber

NG-SDH/Fiber

NGN IP

backbone

ONU/MDU

GbE interface

POI

NGN_CNGbE interface

NG-SDH/Fiber

NG-SDH/Fiber

Ethernet/IP MPLS

CHT’s Broadband Network Architecture

8

CHT Proprietary

C4、C5、IP-VPN and MOD were integrated to the NGN IP backbone (8->4)

4->3->1(2) will depend on some key factors (watch-and-wait ?) The merge of HiLink to VPN (4->3)

The convergence of 2G/3G managed IP to the managed IP backbone (3->2)

CHT follows the trend to converge IP backbones

Managed

3 IP cores8 IP core networks

VPN

MOD

PTSS C5

HiLink

PTSS C4

2G / 3G

VPN

MOD

PTSS C5

HiLink

PTSS C4

3G

2G

HiNet

Integrated IP Cores

Best Effort

Managed

(MPLS)

2007 2008 2009 20102006year

20122011

Managed

I

P

c

o

r

eBest

Effort

HiNet

9

CHT Proprietary

CHT deploys FTTx Network for customer’s value

Fibre Loop

Copper Loop

COCross-connect

Cabinet Building/

Home

FTTB

FTTN/C

FTTEx

FTTH

Feeder

200-3000m

Distribution

100-700m

ADSL2+ 3-20 Mbps(Downstream) <1 Mbps(Upstream)

VDSL2 17a 25-50 Mbps(Downstream) 2-10 Mbps(Upstream)

VDSL2 30a 50-100 Mbps(Downstream) 25-40 Mbps(Upstream)

PON0.1-1.0 Gbps

(Downstream &Upstream)PON

OLT

OLT/L2 SW

AD

SL

2

+

VDSL

MDU/VDSL2

VD

SL

2

GB

E

< 250m

10

CHT Proprietary

CHT’s FTTx Deployment Plan

FTTx access penetration targets (with rate > 30Mbps) The penetration ratio >50% by 2016.

# of FTTx subscribers > # of ADSL subscribers expected by Q4, 2010.

0

1

2

3

4

5

6

7

8

2006

2007

2008

2009

2010(e

)

2011(e

)

2012(e

)

2013(e

)

2014(e

)

2015(e

)

2016(e

)

FTTN/B (VDSL) FTTH

0102030405060708090

100

2006

2007

2008

2009

2010(e

)

2011(e

)

2012(e

)

2013(e

)

2014(e

)

2015(e

)

2016(e

)

>30Mbps coverage >50Mbps coverage

coverage ( % )million ports

Fibre Loop

Copper Loop

Metro

Access

BackBone CO

POP

Cabinet

FTTH

Copper

FTTCab

FTTB

BackBone

Metro

Access

Business

Residential

SME

COPOP

Copper

BackBone

Metro

Access

COPOP

FTTH

11

CHT Proprietary

Co-work in CHT Labs for early CPE

assessment for Spec. compliance and

key quality/performance during

service trial phase

CHT Labs hosted several GPON IOT

Plugfests since 2008

International Well-known (5) OLTs were

invited, 11 domestic and China(T&W) ONU

vendors attended (July 2009)

Win-Win strategy between CHT and CPE Vendors

12

Chunghwa Telecom xDSL

procurement unit cost

173

89

60 54

106

8576 70

0

20

40

60

80

100

120

140

160

180

200

2001 2002 2003 2005 2006 2007 2008 2009year

USD/port

ADSL cost VDSL cost

2001 2004 2005 2006 2007

Class 4 PTSS

Deployment

Nortel Class5

PTSS

deployment

Provide ADSL2+

service

Siemens Class5 PTSS deployment

Provide FTTB service

Deploy FTTH

begin to deploy

NGN/IMS

Deploy FTTN/B/H

1996 1997

Provide

ADSL to

schools

Provide

ADSL2

service

FTTH trial

2002

FTTB

Deployme

nt

2009/2010

1.GPON/ODN

2.PWLAN

3.Finish Phase1

NGN/IMS

deployment

4…

ADSL Trial

CHT Proprietary

Agenda

Broadband profile and progress in Chinese Taipei

CHT’s network deployment for Broadband

Prepare for the future

Concluding Remarks

13

CHT Proprietary

Prepare for the future – Green ICT, Green by ICT

Ref: ITU-T FG ICT&CC 24 March 2009

ICT architecture, ICT devices, ICT

providers, ICT systems, and disposal and

recycling of ICT systems in an eco-friendly

way.

Ener

gy M

Wh/

Y C

ost M

€/Y

(100

k su

bs)

*) Costs for air conditioning are not considered

GPON Energy and Cost efficiency

0

200

400

600

800

1000

1200

1400

ADSL2+ PON FTTH

Energy Consumption (MWh/y) Cost (k€/Y)

80 % Energy & Cost savings

By replacing ADSL2+

With PON *)

14

Growth with Green strategy

The power consumption of FTTH (PON) is 80%

less than FTTN (xDSL) on the average

Cloud computing (virtualization & usage based

tariff …) sounds more energy effective (Flat

rate/all-you-can-eat BM for internet access might

not be good for energy saving)

CHT launched iEN & IRMAS energy management

services

CHT will promote Video presence, remote

surveillance , ITS etc. low carbon alternatives

CHT Proprietary

Prepare for the future – Welcome Cloud Computing

15

Cloud server Cloud server

Cloud server

3G/WiMAX Networks

Managed IP NetworksIP VPN

FTTx Networks

Client

Client

1. UI traffic demands more access BW2. Cloud IDCs are desired, computing

power shifted from intranet to cloud virtual servers

3. latency, reliability,fault tolerance, trust/security, seemless access, … are critical

4. New business models emerging5. …

Expected Effects

G-cloud as well as SaaS, IaaS, PaaS …

For CHT networkCloud IDCs, access and backbone traffic, inter-cloud backbones or VPNOSS/BSS…

…

Opportunities

CHT Proprietary

Prepare for the future – more/broader channels to the world

Participated in investment： 9 submarine

optical cable

Danshui (淡水)：APCN2、TPE

Toucheng(頭城)：APCN、SMW3

Fangshan(坊山)：SMW3、CUCN

Unlanded Chinese Taipei ：JUCN、PAN

AMERICAN、SAFE、TPC5

Purchased IRU：6 submarine optical cable IRU

Landed Chinese Taipei： EAC、FNAL/RNAL

Unlanded Chinese Taipei ：PC-1、TGN、FEA、EuroAfrica

Total bandwidths：394.6Gbps (as of 2009/12)

Participation in investment the APG in

2010~2012, and other potentials

Bandwidth growth is highly expected in the

following years (among Asia Pacific)

淡水

頭城

枋山

APCN2TPE

APCN

SMW3

SMW3CUCN

APG(from 2010)

16

1,769,469

1,353,003

1,067,430

768,168

579,883

437,450

-

500,000

1,000,000

1,500,000

2,000,000

2010 2011 2012 2013 2014 2015

MbpsInternational

Bandwidth Forecast

source：CHTI, 2010/02

CHT Proprietary

Prepare for the future – seamless networking for win-win

17

Collaborate applications to meet the demand

Medical Surveillance

Entertainment

Life and work efficiency

ITS

Logistics

Government

Travel guide

Learning

Library info

Medical

Security

TV

Advertisement

Telecare

Identity / Authentication

Demands in our daily life

Shopping

Enjoy high quality services with 30Mbps high speed networks, 3 billion objects networking, and an Intelligent sensor environment.

Deploy networks to build a UNS environment

Satellite

Terrestrial/Radio

WLAN/WiMAXGPRS/WCDMA/HSDPA/HSUPA

Fixed Networks: xDSL, Cable, FTTx

Device

Content

CHT Proprietary

NM and customer care are essential and will be value-creating

HiNet Network Operation Center

• TR-069 protocol

• eTOM software framework

• ITIL lifecycle process

• CMMI …

• new considerations for

green and cloud

• …

Customer Service Center18

CHT Proprietary

Concluding Remarks

Increase Service

Quality & Reduce

Cost

19

The market power is essential to the growth of Broadband network and services, our experience is worthy of reference

Bandwidth’s Trend is Relentless, Chung-Hwa Telecom will continually develop advanced fiber optics technology (such as all-optics)

Deploys the xPON infrastructure to offer up to 50Mbps bandwidth for user’s triple-play demands this year

Service continuity with quality, architecture flexibility for innovation platform, cost effective and sustainability are the major concerns to phase the NGN transitions

IPTV (MOD), cloud, green, ICT as well as beyond NGN will be pursued consistantly

Opportunities and risks are out there, we are figuring out new win-win strategies and differentiated values to customers

CHT Proprietary

Thanks for your attention.

20