Bill Lan

Chief NBN Strategist

Huawei Technologies

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Broadband connection has become the core competence to the digital society

USA redefines broadband to +25MKorea: 1G broadband by 2020

UK: 500M super fast broadband

NGA1.0: FTTC @40/80M

NGA2.0: G.fast @500M

China: 100M Fiber City

Giga Korea 2020

10Gbps (SKT)

1Gbps (100%)

Gigabit City (2015)

25Mbps

100Mbps

(universal)

(developed)

1Gbps

20Mbps (universal)

(developed cities)

China NBN 2020

“I believe America should lead the world in broadband penetration”

“Universal Broadband Access is crucial for Britain’s economy”

Digital Britain

ITU Broadband Target 2020

EU promotes 100Mbps by 2025

2020Fast BB @30M (100%)

Ultra BB @50M (50%)

2025Ultra BB @100M (100%)

Digital Agenda

55% HH Internet Access

60% Internet Individuals

90% BB Coverage in Rural

Tariff <5% of average

monthly income

2020100Mbps (all cities)

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BruneiFeb 2010

$2.9bn on FTTxconnection, 1.3m lines, 50% HHs coverage with 10Mbps

MalaysiaSep 2009

New ZealandAug 2011

1.1 bn connect 80% of population at >5Mbps. 97% schools with 10Mbps fiber connection

Sri-LankaJan 2014

$0.1 bn on IP backbone and e-health network

$12 bn on fiber backbone, metro, 175m broadband connections at 2-100Mbps

AustraliaJuly 2010

$22.9 bn on fiber backbone, metro and 1,9m broadband lines at 12-100Mbps

$0.74bn on fiber IP backbone, metro,access network at 100Mbps to 1Gbps

SingaporeMar 2009

$323 bn to 50% of households and 95% of administrative villages. FTTH in all urban with 20Mbps, 4Mbps in rural

IndiaMay 2012

$0.2bn on 200k FTTH lines

Thailand

Laos Cambodia

Nepal

Bangladesh

MyanmarChinaAug 2013

2009

2010

2011

2012

20132014 2016

Asia Pacific is stepping into the digital society by government intervention

2017

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6 policy approaches catalyze ubiquitous broadband development

3COUNTRY-SPECIFIC

PPP MODEL

Attract private sector

participation and

investment

4STATE FUNDED

SUBSIDY

Policy incentive and

financial subsidy on

CAPEX investment

6POLICY STIMULUS

ON DEMAND AND

ULTILIZATION

Promote broadband

by lowering threshold

5ENCOURAGE COST

REDUCTION

Easy access ROW and

mandate collaborative

infra. construction

1A GOVERNMENT- LED

BROADBAND POLICY

Clarify broadband

objectives and

implementation plan

2MANDATE NETWORK

OPENNESS

State intervention on

infrastructure sharing,

investment protection

5

5Source : ITU/ICT Regulatory Database

14%

66%66%58%

88%

OtherPromote onlinepublic services

Promote adoptionof BB services &

applications

Connect (x)% ofhouseholds with

broadband

Build nationalbroadband

infrastructure

Broadband development is a national initiativeto enhance accessibility and adoption

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6

3

1 5

42NBN

Objective

Nationwide

High Speed

Rapidly Deployed

Affordable

Innovation

High access speeds for uplink and downlink in order to:

Enable next generation applications Promote innovation

Mandate nationwide ( > 80% population) coverage + broadband community centers in rural or low income areas in order to

Enhance accessibility Achieve greater social inclusion

Utilize existing network infrastructure & attract private sector investment

Mandate all market segments must be served by competitive wholesale and retail tariffs in order to

Increase uptake Eliminate digital divide

Creating a health ICT ecosystem which

Enable service diversification Promote innovation

Favor local content development

A government-led broadband objective accelerates digital inclusion for all

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Policy Consistency

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Tier bandwidth supply leverage user demand and service cost

Australia NBNCo tiers bandwidth supply by providing cost effective access technologies

93% of Australian urban and suburban population are served by FTTx with 100Mbps broadband access

7% rural and remote rural areas are served by WTTx & satellitewith 12Mbps Internet access, nearly the same deployment cost

China govt. mandates tiered bandwidth supply among urban and rural areas

China Government aggressively promotes FTTH nationwide

By 2020, broadband access capability in developed cities, cities and rural areas will reach 1Gbp, 100Mbps and 20Mbps respectively to meet different user needs

Broadband Subscribers by Technology

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Model 2 (Logical Layer Open Access) is widely adopted

Model 3 is the most complete open access model only in Singapore

Technology Dependency

Nat

ion

al S

trat

egy

De

pe

nd

en

cy

Model 2Model 1

RSP

Logical Layer

Open Access

Active Net

Passive NetPassive Net.

RSP

Active Net

Model 3

RSP

Active Net

Passive Net

Physical and Logical

Layer Open Access

Physical Layer

Open Access

Other regulations to promote NBN

− Local Loop unbending

− Equal access and interconnection

− Non-discrimination to operators

Model 1 (Physical Layer Open Access) suitable utility companies, municipal-owned fibre network

Nordic Countries, Qatar Municipal/Utility Nets

Australia, Malaysia, UK, NZ…

Singapore

Network openness avoids duplicated construction and promote competition

9

9Source : ITU/ICT Regulatory Database

Government financial support is critical to national broadband development

33%

48%

42%

25%

19%

OtherPublic-privatepartnership

Government grants/ other direct

subsidies

Universal ServiceFund (USO)

Dedicatedbroadband

development fund

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PPP model + financial incentive encourage private investment

Government Carriers

Guiding PrinciplePolicy Assurance

Policy IncentiveFinancial Subsidy

DBO NetworkFast Deployment

Network OpennessFair Interconnect

Public Interest

Share Risks

Experienced Contractor

Fast Network Deployment

Cost Efficient Investment

Increasing BB Take-up

Socioeconomic Benefit Enablement

Concessional Loan /Financial Allowance

Feasibility Study Project Evaluation

Project Funding Resources

• Maximizing broadband coverage to realize digital equality

• Increasing financial incentives to attract private sector investment

• Favored network openness to promote service competition and local content development

Repayment /Tax Collection

Financial Institution

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Public Funding

EU Broadband Target and Funding

Basic BB

Fast BB

Ultra BB

2-10Mbps

>30Mbps

>100Mbps

100%

100%

50%

€38-58bn

€181-268bn

2013

2020

2020

Type BandwidthCoverage

(inhabitant) EU InvestmentDeadline

White Area

Grey Area

RedArea

Broadband currently unavailable No private network rollout in the next 3 years

Only one broadband network operator in present Certain categories of users may still not be adequately served Absent of regulated wholesale access tariffs Retail prices are not affordable

At least two broadband network operators in present Broadband services are provided under competitive condition

Region Network Availability

Broadband Network Operator

No Broadband Network Operator

Up to 50%

Up to 85%

Implemented business Model EU Funds Scale

Market access gap

between what the

private sector can deliver

and what is needed by

the public

Smart funding in economic disadvantage area could save government financial involvement

Source: Ofcom, UK

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Government financial subsidy for ubiquitous broadband, e.g. Malaysia and UK model

Malaysia Government co-invest with TM andenable broadband rapid rollout

UK Government subsidize 50% of CAPEX investment only in rural area

Portion of UK Government Investment

Malaysia’s HSBB investment began since 2009…

20% Government subsidy (paid after installation)

Mandate network openness

TM sole builder (no bidding)

FTTx replaced legacy ADSL

HH bandwidth upgrade from 386K to 20Mbps; Enterprise bandwidth to 100Mbps

Fast rollout, 1.3mn homepassin 2 years, but main urban areas only (no rural)

Ubiquitous and affordable

− BT Openreach won all BDUK contracts

− Mainly FTTC connectivity, wireless access as complement

− Pico DSLAM: copper bonding backhaul extend distance

NGA: Urban Area (2/3 of pop.)

− No investment from UK Govt.

− Need to open Ethernet pipe to other ISPs

− BT Openreach built all NGA networks

− FTTC/P enable bandwidth upgrade from 8M to 20M for millions of users

BDUK: Rural Area (1/3 of pop.)

− Govt. and local community funding 50% of CAPEX

TM HSBB Last mile NGN core Global IGW capacity Ecosystem Platform

TM

RM 10.5bn

RSP

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High construction cost is the major investment threshold for accessible and affordable BB

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Easy ROW access and infrastructure sharing save deployment time and cost

Free Access ROW

Public property: free ROW without

authorization (street/footpath/airspace…)

Private property: free ROW under

conditions of no line, line expansion

or existing line unable to joint use

Austrian Telecommunication

Act (TKG 2003)

Operators of public telecom networks

are entitled to use thoroughfares free

of charge

Utilities database for search and join

construction

German Telecommunications

Act (TKG)

Public Infrastructure Sharing One-Stop Center for Construction

Government at all level shall assign land for the construction of public telecommunications facility; Investors shall identify land areas, payment of compensation for ground clearance.

Traffic works, electricity poles, water supply and drainage pipelines, and transmission lines must be designed and constructed to ensure the installation of telecommunications transmission lines

Government shall specify the common use of utility infrastructure

15% CAGR on FBB since 2011

Vietnam 2011 Regulation Reform

Municipality must provide operators

free access to their infrastructures

Municipality must promote sharing

and coordinate upcoming civil works

to minimize civil disruption

Civil works on private land require a

4 weeks notice. If 6 weeks without

controversy, permission will put in

force

No compensation for access to

private and public lands

Netherlands Legislation

(2007)

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Collaborative infrastructure construction largely save CAPEX investment

Infra Sharing + Co-Deployment Joint Venture + Co-Investment Partnership + Franchise

Orange cooperated with electricity

company co-deploy fiber and electric

cables through fully sharing pipe,

infrastructure, labor and cost

Saving 14% of ODN investment and

12 months lead time

Regulator allow electricity company

sharing infrastructure to Teclo and

offering communication services

ESB and Vodafone signed a 50:50

joint venture, €450 million

investment in building 500,000 FTTB

lines with 200~1000Mbps

broadband capacity in 50 towns

Fiber cables are deployed on ESB’s

existing overhead and

underground infrastructure,

ensuring cost saving and efficient

rollout

Deployed drop cable by cooperating

with 42 regional electricity co.

30% cost saving by ducting fiber in

urban + aerial fiber in rural

Network construction start only >

60% of potential subscriber sign up

Encourage residents dig their own

trenches to save connection fee

68% FTTH market share. 4 years

won Norway’s most prestigious

award for customer satisfaction

(EPSI)

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Last mile fiber pre-deployment and innovative engineering technologies maximize efficiency

Mandating Fiber from the Home Impose Duct Sharing Obligation Innovative Engineering Tech

Ministry of Housing mandate

all developers must deploy

90% aerial fiber deployed in

green field (True, AIS, TOT)

80% cost saving by

simplifying civil work and

ODN engineering

40% ahead deployment

schedule

FTTH facilities including underground

pipe, duct and last mile fiber in new

construction or refurbishment of

housing, buildings and communities

23% cost saving on ODN CAPEX

80 million FTTH lines were deployed

by 3 major operators in 2015 Telefonica deploys outdoor

cables and installs pre-

connector enabling FAT

plug & play, and

deployment efficiency

FTTH connect 3 million

homes with $450 per

premise in one year

New building: mandate

equipped with at least 2

fibers per home to be

shared by operators. In house wiring

belong to building owner

Old building: new or upgraded

infrastructure should be shared to

avoid monopolization of in-building

infrastructure by 1st operator

1st operator to reach an old building

has to install at least 2 fibers per

home and share to other operators

2nd operator will pay 50% of the costs

incurred in the installation of shared

infrastructure.

3rd operator will pay 33%

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Government stimulus measures enhance broadband perception and utilization

Leverage huge number of service points

of Post Office as Remote Internet

Center, South Africa, Cuba, Middle East

138 Internet Centers in public library

and 246 Community Broadband

Centers for 1,015,000 users, Malaysia

ETECSA plan to set up 20,000 Internet

Access Outlets/Cyber Cafe through

FTTx by 2020, Cuba

Public free WiFi hotspots in public square nationwide; internet penetration increased from 9% to 34.7%, Cape Verde

Improve Internet Usage, +16,600 PCs

hand out to 320K children, PC ownership

uplift from 1 for 19 to 12, Columbia

e-Education Program for govt.

officers, teachers, students, soldiers,

woman and elder, Malaysia

Import duty & sales tax

exemptions on broadband

equipment + access device

Malaysians who buy

computers can be

exempted 3,000 MYR in

sales taxes every 3 years

Tax deductions to

enterprises for PC

purchase and broadband

subscriptions

1.2 million civil servants in

Malaysia can apply for

5,000 MYR every 3 years

to purchase computers

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Huawei is the most experienced business partner in NBN domain

Lines Delivered

Overseas

70%

25M

30

UK

Qatar

Global

Market Share

UKUrban + Rural

Deployment

MalaysiaE2E Solution

Multi-Vendor EOT

QatarE2E Planning

Turnkey Delivery

SingaporeWorld First

Open-Access Network

NBN Development

Strategy

Business & Network

Consultancy

Network Planning

E2E Innovative Solutions

E2E Professional Services

Turnkey & EOT Delivery

Joint Go-To-Market

Joint Innovation Center

Planning

Deployment Operation