Digital Content & IP Transit Growth

Caspian Telecoms, Istanbul, Turkey, 24th April 2014

Konstantin NovikovWholesale, CIS countries

2Eurasia Highway

GLOBAL LOCATION OF DIGITAL CONTENT

Total datacenter space has reached 31 million sq.m.

Over 7 million of them is available for commercial lease

Most of digital content is located in USA and Europe

Caspian region will require a good IP connectivity to Europe

Source: DCD Intelligence

Total Datacenter Space, mln sq m

Worldwide Datacenter Distribution

Source: www.datacentermap.com

3Eurasia Highway

IP TRAFFIC DRIVERS IN CENTRAL & EASTERN EUROPE

For past five years IP grew 4.6 times in Central & Eastern

Europe

Private customers consume over 80% of total IP traffic

Mobile data grow fast, but it is still on enfant stage in traffic

volume

Video is the contributor №1 in traffic volume

Source: Cisco, 2012

4Eurasia Highway

BROADBAND SERVICES IN CIS COUNTRIES

Total number of broadband users has reached over 33 million

in CIS countries & Georgia

Major markets: Russia, Ukraine, Belorussia, Kazakhstan and

Azerbaijan

Economy strength has a strong influence on broadband

penetration (by population)

Source: J’son & Partners Consulting

BB Users in the Region, thousand

Source: ITU

BB Penetration vrs. GDP per Capita

5Eurasia Highway

WIKI AS A MIRROR OF GLOBAL CONTENT LOCATION

Russia is among major “sources” of digital content in the Internet

Average number of references in all languages in Wikipedia

Source: New Scientist, April 2013

6Eurasia Highway

BROADBAND SERVICES IN RUSSIA

Source: IKS Consulting

Penetration of broadband services will reach ~58% of total households that is

closed to top limit

While number of broadband subscribers is going to saturation, a “heavy” video

supports total traffic growth

As a result telecom carriers have to transit more and more IP traffic

2009

2010

2011

2012

2013

High-Definition Video 11 13 14 16 18

Standard-Definition Video

6 6 7 7 8

Short-Form Video 3 3 3 4 5

Russia: MB per Minute for Internet Video

Source: Cisco

7Eurasia Highway

IP transit demand is fast growing segment, CAGR 80% in 2009 - 2013

Russia generates 65% of total international IP uplinks in CIS

~ 50% of CIS countries uplinks (excluding Russia) go through Russia

Commercial datacenter space exceeds 100 thousand sq m in Russia

IP TRANSIT VIA RUSSIA

Source: TeleGeography

Moscow St.-Petersburg Others

Datacenter Space Distribution in Russia

Source: J’son & Partners Consulting

8Eurasia Highway

TTK AT GLANCE

Largest Fiber-Optic Backbone in Russia length — 75 000 km transmission capacity — up to 3200

Gbps over 1000 access nodes in 78 Russian

regions 20 cross-border interconnections telecom bridge between Europe &

Asia

Comprehensive Telecom Solutions layout of enterprise networks based

on advanced technologies full spectrum of fixed voice services network security & monitoring building of telecom infrastructure wholesale services

Guaranteed Quality certified services information security

SLA

Own Access Infrastructure local access networks in more

than 180 Russian cities international gateways in

London, Frankfurt, Amsterdam, Stockholm, Hong Kong, Tokyo

9Eurasia Highway

MARKET POSITIONS

Market Share in the Russian Market

4%

40%

60%

Source: Direct Info, 2013

15%

Enterprise Networks

Europe – Asia Transit(via Russia)

Telecom CarrierNon-Voice Services

Enterprise Long-

Distance Voice

Services

TTK is fifth largest telecom operator in Russia - CNews Analytics 2013

Eurasia Highway

TTK BACKBONE

10

Transmission Capacity (ULH DWDM) — up to 9 Tbps Multiple ring topology & high service availability – up to

0.9995 Automatic restoration switch for redundant services < 55

ms Service restoration time < 4 hours Maintenance team - every 200 km 22 international gateways: Finland, Estonia,

Lithuania, Latvia, Poland, Belarus, Ukraine, Azerbaijan, Kazakhstan, Mongolia, China, North Korea, Japan

International nodes: London, Stockholm, Amsterdam, Frankfurt, Hong Kong, Tokyo

Eurasia Highway

11Eurasia Highway

Today TTK offers both IP transit and clear channels from the Russian border to major European destinations:

London Amsterdam Frankfurt Stockholm Hong Kong Tokyo Capacity – up to 10GE or 10G Total transit TTK capabilities are

exceeded 4 Tbps in Central Russia due to implementation of 10&40G&100G DWDM systems and development 10GE IP MPLS

2009 2010 2011 2012 20130

500

1000

1500

2000

2500

3000

3500

4000

4500

TTK Transit Capabilities (Central Russia), Gbps

> 4 Tbps

TTK CAPABILITIES

12

8 Testovskaya St., Moscow, RUSSIA

tel.: +7 (495) 784-66-70

fax: +7 (495) 784-66-71

www.ttk.ruemail: k.novikov@ttk.ru

Eurasia Highway

Thank you for attention!