the alu 'broadband for everyone' success...

The ALU 'Broadband for Everyone' success story

ALL RIGHTS RESERVED. COPYRIGHT © ALCATEL-LUCENT 2011.2 |

ALCATEL-LUCENT

”””” Ben VerwaayenChief Executive Officer

Broadband everywhere is speeding up life and

business. It takes no time to go from having a

new idea, to touching people’s lives. We must

innovate – and help our customers innovate – at

the speed of ideas.

““““

• Headquarters: Paris, France

• Annual Revenues: approx. €16 billion

• Employees: 79,000 +

• 130 countries

FAST

FACTS

• R&D Budget: €2.66 billion*

• Active Patents Held: 27,900

• Patents Awarded in 2010: 2,400

• Nobel Prizes Won: 7

““““

REALIZING THE POTENTIAL OF A CONNECTED WORLD

Note: * Reported R&D in 2010 expenses were €2.66 billion after a net impact of capitalization of €(10) million of development expenses.


� 27,900 active patents � Collaboration with >250 universities worldwide

�Multiple Open Innovation Initiatives

PRESENCE IN 8 COUNTRIES

� Belgium

� China

� France

� Germany

LIFE-CHANGING TECHNOLOGIES

� DSL� PON�WDM� The transistor

MARKET IMPACT

GLOBAL REACH A HERITAGE OF INNOVATION

DEFINING THE FOREFRONT OF THE INDUSTRY

2010 BREAKTHROUGHS

� lightRadioTM

� 100G optical transmission� DSL Phantom Mode

� India

� Ireland

� South Korea

� United States

� Digital signal processing� CCD� Communications satellites� The laser� Cellular telephony

BELL LABSINNOVATING AT THE SPEED OF IDEAS


GLOBAL REACH

N. America: ~36% Europe: ~32% Asia Pacific: ~18% Rest of world: ~14%

more than 130 countries

Worldwide Presencemore than 100

Employee Nationalities

CanadaUK

France

Australia

Brazil

Research Centers

Product & SolutionDevelopment Centers

IP Transformation Centers

Executive Business Centers

USA

Belgium

Ireland

GermanyNetherlandsItalySpain

Israel

Turkey

Russia

PolandRomania

Slovakia

China

South Korea

TaiwanIndia

% of 2010 revenues

Singapore


Overall Situation and Key Trends

Legacy revenue is declining in a growing number of markets.

Profitability will be erodedfor less dominant telcos.

New business modelsare still elusive.

New competitors for telcos.

The structure of the industry will evolve.

The cloud services opportunity for telcos: clear and present,

but elusive.

Average revenue declined among 40+ telcos 5.5% (in US$) from 2008 to 2009.

A telco with a smallmarket share will seeits EBITDA margin progressively diminish towardthe 15% to 20% range, or less, by 2014.

Through 2013, fewer than 15 telecom carriers worldwide will succeed in obtaining over 10% of their revenue from nontraditional service initiatives.

By 2014, over-the-top players will capturealmost 10% of consumer mobile voice minutesin developed markets.

By 2012, 80% of Tier 1 telcos will be involvedin advanced intra-industry alliances, similarto those undertaken by airlines.

By 2013, telcos are unlikely to garner(organically) more than 5% of the cloudservices market.

Source: Gartner, 2010


Universal broadband

French digital plan

� Very high speed BB in grey & white areas

� 2B € for infrastructure, 2.5B € for services

Digital Britain

• 2Mbps universal broadband access by 2012

• £ 200M NGA fund

German Broadband Plan

� 100% bb coverage by end 2010

� 50Mbps for 75% of hh by end 2014

� Spectrum allocation for LTE

Others

� Draft BB plans in many European nations

China’s recovery plan

� 4 Trillion RMB

� ICT included in pillar industries program

India National Backbone

� 4.5B fiber backbone

� 90% of population bb coverage by 2013

Connecting America Broadband Plan

� Universal broadband – “100 for 100”

� Foster competition & innovation

� Ensure Spectrum availability

� E-services (e-health, e-education, etc)

Europe’s Digital Agenda

� EU countries to adopt national VHS broadband strategies

� 100% BB coverage in 2013

� 30 Mbps for all in 2020, with 100Mbps for 50% of EU citizens

Brazilian “Plano Nacional de Banda Larga”

�BB for 50% of urban and 15% of rural hh

�60 M mobile access

�$41M investment (1/3 public, 2/3 private)

Australian National Broadband Network

� 100Mps to 90% of subscribers

� 43B A$ ( 23 B€)

New Zealand “BB Investment Initiative”

� 1.5B NZ$ investment plan

� Urban and rural areas


Consumer Services:Overall Situation and Key Trends

• Consumer communications services: ARPU is in decline, but the overall worldwide top-line market continues to grow, driven by new mobile subscribers in emerging markets and the continuing adoption of broadband.

• Broadband everywhere is close to reality in many major markets as wireless broadband hits mass coverage and higher speeds — the foundation of the "always-on" connected consumer.

• The mobile Internet hits mainstream.

• New devices, not services, are the driving force of consumer sector innovation— and the adoption and usage of applications.

• Social applications are changing the way consumers communicatewith each other.

By 2014, consumerswill spend $2.2 trillion annually on:

• Communications Services

• Devices

• Digital Content

-

400,000

800,000

1,200,000

1,600,000

2,000,000

Source: Gartner, 2010

8

COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ALCATEL-LUCENT — INTERNAL PROPRIETARY — USE PURSUANT TO COMPANY INSTRUCTION

By end 2010: 19,9% of all fix BB subscribers are FTTx

Source: Infonetics/Broadband Trends/ Alcatel-Lucent

By 2015: 680M fixed BB users and >120M FTTH users

CAGR 2007-2010Number of BB subscriber worldwide

67%

68%

9%

8%

Fiber

VDSL

Fiber has passed the point of no returnThe question is not any more why fiber, but how fiber

ALU •52% VDSL MS•32% GPON MS

FTTx UPTAKE WORLDWIDE

9


FTTx Price Evolution

OLT

ONT


HIGH LEVERAGE NETWORKTM (HLN)


HIGH LEVERAGE NETWORK™ A PLATFORM FOR VALUE CREATION

LEVERAGE YOUR NETWORK• Address the data explosion• Deliver service innovation at speed

• Transform and simplify your network

PROVIDE BROADBANDEVERYWHERE• Deliver wireless all around• Enable open access for all• Bridge the fixed and mobile worlds

CAPTIVATE YOURCUSTOMERS• Pioneer new media, new content, new applications

• Manage the real-time end customer experience

NETWORK EVOLUTION

UNIVERSAL ACCESS APPLICATION ENABLEMENT

OPERATIONAL TRANSFORMATION

TRANSFORM YOUROPERATIONS• Optimize costs• Increase focus on superior QoE and growth drivers

• Mitigate transformation complexity and risk


COVDSL2

Wireless

FTTH

New fiber-to-the-home rollouts� 100+Mbps� First next-gen fiber (10G PON) already available

FTTN VDSL2

FTTCVDSL2

FTTBVDSL2

Wireless broadband� For quadruple-play� Innovative easy to deploy modular solutions like lightRadio

Reuse copper infrastructure� Fast and cost effective up to 100Mbps

� DSL innovation boost speed: bonding, vectoring, phantom mode

Beyond “just” building bandwidth� Application Intelligence for extending service offering and network optimization

Universal Access - from vision to reality

Mix of technologies – fiber, wireless, copperMix of existing and new players – ILECs, CLECs, (local) governments and utilities


Fiber Evolution

NEW

NEW

NEW

NEW

10G XG-PON1 line card

ISAM FD-16

ISAM FD-8

ISAM FD-2 ISAM FX-4

ISAM FX-8

ISAM FX-16

NG PON a reality in 2011:

� First 10G GPON line cards on market

� Available on existing FD shelves, and on new ultra-high capacity FX shelves

� FD/FX are simply two ISAM shelf options – same line cards, software, management


Point of Departure

Access-centric

Walled gardens

Dumb-pipe

Commoditization of networks

Point of Arrival

User-centric services

Global, cloud-based services

Intelligent preference network

Full value for network assets

JOURNEY TO A NEW VISION

15


ALCATEL-LUCENT THE PARTNER FOR ACCESS NETWORKS

Unique Combination of experience and network expertise

#1 in DSL & GPON*

250 ISAM customers

Worldwide presence

Leader in technology

Ahead in innovation

Proven business partner

* Source: Dell’Oro and Infonetics

the alu 'broadband for everyone' success...

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