new players, nerw services: new wholesale challenges
DESCRIPTION
TRANSCRIPT
Telecom Italia Sparkle: Proprietary & Confidential Information
Francesco ArmatoTI Sparkle, Senior Vice President, South and Central
America RegionCEO, Latin American Nautilus
TI SPARKLE
New Players, New Services: New Wholesale Challenges
Telecom Italia Sparkle: Proprietary & Confidential Information2
AGENDA
Company Background► Telecom Italia International
TI Sparkle: International Core Network Operator► Network► Credentials► Company Key Figures► Presence Worldwide
New Players, New Services, New products► New customer needs► New scenario► Evolution of the fixed and mobile retail network offers► New drivers: the post convergence► New challenges
TI Sparkle Challenge / Our Answer
BACKGROUND
Telecom Italia Sparkle: Proprietary & Confidential Information3
Telecom Italia: a Top Company leader in ICT
TOP ICT company leader in innovation
Operations in Europe, South America and the Mediterranean
Over 27 million fixed lines in Italy and internationally
57.8 million mobile lines, 32.4 of which in Italy
8.7 million broadband access in Europe, 6.8 of which in Italy
Number of employees: 83.209
Revenues: 31.3 Billion Euros (29.9 in 2005)
EBITDA: 12.9 Billion Euros (12.5 in 2005)
Industrial Investments: 5.1 Billion Euros ( 5.2 in 2005)Results at December 31, 2006
Key areas of growth come from International activities
Telecom Italia Sparkle: Proprietary & Confidential Information4
TELECOM ITALIA INTERNATIONAL FOOTPRINT
LANautilus Backbone
Med Nautilus Backbone
Pan European Backbone
ETECSA (Cuba)
Entel Bolivia
Telecom Argentina
TIM Brasil
Avea (Turkey)*
Hansenet (Germany)
BBNed (NL)
TI France
Key operations in European Broadband (France, Germany and NL), Brazilian mobile and
International Services (TI Sparkle)
Global Services Offering
* Asset held for sale
BACKGROUND
Telecom Italia Sparkle: Proprietary & Confidential Information5
TELECOM ITALIA SPARKLE
Wholly owned subsidiary of Telecom Italia with the objective of developing TI Group’s international business.
Full international service provider, offering a complete range of solutions spanning Voice, IP, Bandwidth and Managed Data services for fixed-line and mobile operators, ISPs and multinational corporations.
TIS, through its Consulting Services Team, makes available to international operators Telecom Italia technological & commercial Know-How and ability to innovate
TIS means networks, technological platforms and a worldwide commercial presence, in order to provide the best cost, top performance services to the main players of the international telecommunications market.
INTERNATIONAL CORE NETWORK OPERATOR
Telecom Italia Sparkle: Proprietary & Confidential Information6
Leading global service provider, offering Voice, IP and Data solutions for fixed-line and mobile operators, ISPs and multinational corporations (MNCs)
Wholly owned subsidiary of Telecom Italia created in 2003 with the objective of developing the international wholesale and MNCs business and of supporting TI Group business units for the provisioning of international Services
TI Sparkle overview
Headcount
TI Sparkle
Subsidiaries
~880
~220
Main Offices abroad 21
Network coverage
# Cities
# POPs (incl. Telehouses, Datacenters, proprietary facilities)
~ 45
~ 110
Virtual PoPs through partners
> 1000
Company Data
189EBIT14%% margin277EBITDA
2,044Revenues2005(€M)
(Minutes Bn)13.7
Voice traffic(Gbps)
488IP/Data traffic
(# Circuits)2.248MNCs
214
13%307
2,2962006
13,7
824
2.810
Key Figures
104
15%147
1,0041H07
7,8
955
3.020
128
12%214
1,8012004
12.9
158
1.625
Telecom Italia Sparkle: Proprietary & Confidential Information7
11,5%10,6%
10,0%
8,3%
5,3%4,7%
11,9%
Europe – Market share on International WholesaleEurope – Market share on International Wholesale
Source: OVUM 2005 (based on 2004 revenues)
Top 1
Top 1
Wholesale Business: Top 1 in Europe (Ovum), with +300.000 Km fiber networks in 4 continents
Wholesale Mobile: Leader in signaling, roaming and hubbing services:
+ 475 GSM Roaming Agreements, + 240 GPRS Roaming Agreements, + 50 3G Roaming Agreements + 150 CAMEL Roaming Agreements + 165 SMS Interworking Agreements, + 175 MMS Hub destinations, Signalling connectivity to +700 MNOs
Wholesale Voice: Top 1 in Europe (Ovum) and Top 3 worldwide (Telegeography), +500 direct voice I/C (+80 with MNOs)
Wholesale IP&Data: “Seabone” among the fastest IP backbone in the world and ranked TOP 10 worldwide, 2° in Europe, 1° in the Mediterranean (Renesys)
Multinational Customers services: Top 1 in Italy (SIRMI) and emerging player in the global market
OUR CREDENTIALS
OUR CREDENTIALS
Telecom Italia Sparkle: Proprietary & Confidential Information8
Europe: TI Sparkle positioning in the Market
Alice - the leading European BB brand outside domestic market thanks to a
European plug & play integrated triple-play approach
Seabone is already the unique provider for the
fastest growing Broadband European
community
France
TI France: 4th player
~ 0.85M BB customers Italy
Germany:
Hansenet+AOL: 3rd player
~ 2.2M BB customers
(2nd considering NB + BB)
The Netherlands
BBNED: 1s t challenger on wholesale ~ 0.2M BB customers
TI: Market leader
~ 7.3M BB customers (Retail + Wholesale)
June 2007
Telecom Italia Sparkle: Proprietary & Confidential Information9
TI Sparkle Cross Border Network
55.000 km/fibre Pan European Backbone
► 30.000 km Latin American Nautilus
► 8.000 km MEDiterranean Nautilus ► 3.500 km Italian Network► 375.000 km submarines cables
► Optical fibre network with DWDM technology ► Integrated Architecture for Voice/IP/Multimedia
services. Complete decommissioning of TDM switches achieved in Nov. ‘05
► Scalable POP architecture► Automatic protection on fibre / equipment► Surveillance and management 24h x7d basis► 2 Network Operation Centres + 2 Regional NOC
Palo Alto
Americas Europe Asia
Mediterranean
LIMA
Ashburn
Singapore
Il Cairo
Athens
Warsaw
Prague
Chicago
AtlantaSMW-3, 4
LosAngelesDallas
12 new IP/MBW/MNCs
PoPs in 2007
Telecom Italia Sparkle: Proprietary & Confidential Information10
TIS Latin American Backbone
SAC Cable System • Cable length: 20,000 km in a
ring topology• Capacity: 1 fiber pair per ring,
32 lambda @ 10 Gbps per fibre pair
MAC Cable System• Cable length: 10,000 km ring
topology• Capacity: 16 lambda @ 10 Gbps
Rio de Janeiro
New York
Miami
St. Croix
Fortaleza
Buenos Aires
La Paz
Santiago
Lurìn
Panama City
Sao Paulo
Caracas
MACMAC
SACSACSACSAC
Lima
TIS SUBMARINE CABLE SYSTEMS & BACKBONE
TIS PoPLANDING STATION
Mexico City
2007 Achievements• RFS additional 20 Gbit/s
capacity• Implementation of additional
60 Gbit/s started in June ‘07• Implementation of core/edge
architecture for the S. Paolo, Buenos Aires, Santiago del Chile PoPs
Telecom Italia Sparkle: Proprietary & Confidential Information
Voice
Data & IP
Mobile
Corporate Networks
Consulting
TOP 2 in Europe and TOP 4 for worldwide traffic collected on a pure international wholesale basis (home market excluded) - Telegeography
Leading positioning on Signaling, Roaming and Hubbing solutions (+450 GSM Roaming Agreements, Signaling to 600 MNOs)
TOP 1 in Italy (SIRMI) and emerging player on global market. Business launched in 2003. Key customers: Shell, AFP, EU Central Banks
Focus on strategic regions, leveraging on wide TI Group know-how and skills
“Seabone” ranked TOP1 in the Mediterranean, TOP3 in Europe, TOP 14 worldwide – Renesys (Sept 2007)
TI Sparkle market positioning
Telecom Italia Sparkle: Proprietary & Confidential Information12
New Players, New Services, New Products
The retailers set the pace for the wholesalers
The new players and products come from the outskirts of the telecommunications market:
► Entertainment (music, TV and film contents)► Consumer electronics
Telecom Italia as a leading TLC operator is constantly looking for new areas of growth developing products to integrate in its offer the latest market demands
Telecom Italia’s retail cutting-edge product development define TI Sparkle wholesale product challenges.
Sparkle, as the wholly owned subsidiary of Telecom Italia with the objective of developing TI Group’s international business, has the challenge to develop a product mix to extend the services abroad
Telecom Italia Sparkle: Proprietary & Confidential Information13
New Players, New Services, New products: New Customer Needs
The evolution of the user profile
Growth of VAS Mobile drived by Person to Person applications (SMS-MMS)
Use of non TLS applications on the mobile terminal (Radio, Photo, MP3 player…) Growth of broadband penetration pushed by “all over IP” services:
”VoIP Only Players”(Skype-like) and Web content players (Google Talk, …) not only in consumer but also in corporate market (security and equiment cost barriers are already broken)
The video component appears and it will transform the TLC operator in a “Content aggregator” sooner or later. Not to substitute the content providers but to facilitate the distribution of the contents through all possible channels.
Gaming and on-line music growth thanks to the change from “off-line media devices” to “broadband-enabled media devices”.
Phone alternative use
Internet Use enrichment
In this context the customer is more sensible to easyness of use, interoperability and QoS
Telecom Italia Sparkle: Proprietary & Confidential Information14
New Players, New Services, New products: New Scenario
Fixed and Mobile Netwoek operators are already looking for new opportunities to grow outside the traditional TLC services:
IPTV, Entertainment, Film, Concerts, and also ITC applications for Small & Medium Corps.
The barriers between the differnt TLC networks have dissapear thanks to solutions using high integration technologies.
Migration of voice and data from traditional networks to a unique IP network layer.
Introduction of “FixedWireless”technologies ( WiFi, WiMax, WiBro…)
Evolution towards service platforms base on homogeneous standards (IMS)
Consolidation of TLC terminals with consumer electronics functionalities (photo, music, TV…)
Telecom Italia Sparkle: Proprietary & Confidential Information15
Evolution of Mobile and Fixed Network Retail Offers
Evolution of Fixed Network Offer:
Triple Play, the digital convergence of voice, data and TV
Broadband & IPTV► Evolution of ADSL to ADSL2+, speeds up web surfing with downlinks up to 20Mbps plus a
enhanced quality for IPTV.► TI launched IPTV service Alice Home TV” (two years ago - december 2005) “, now works
on adding more contents every day: not only live contents (concertss, realityshows) but also TV Channels (Cinema channles and public broadcasters)
Mobility also at home► TI already offers the possibility to move in a broadband wired and wireless multiterminal
environment► Alice Home TV gives access to voice & data networks and also to contents and VAS
services
Telecom Italia Sparkle: Proprietary & Confidential Information16
Evolution of Movile and Fixed Network Retail Offers
Innovation, Segmentation and Community► The offers suffers more and more segmentation by groups of customers► At the same time within each segment new community services are created► The commercial offers also leverage on pakaging the terminals to be used indoors and
outdoors that will soon be substitued by UMA cellular terminals
Broadband access and TV on Mobile Terminals► WiBro (Wireless Broadcasting ) technology aims to wide range wireless access (its an
alternative for. Wi-Max)
• Born in South Corea as a standard for Samsung.• Succesfully tested for the first time by TI at Torino 2006 Winter Olympic Games.• Its main difference with Wi-Max is the need of a licence but is a technological
advantage to assure QoS (facilitates EMI control)• Interference is the main problem for Wi-Fi and could be also for Wi-Max.
► In May 2006 TI launched the commercial offer of DVBH(Digital Video Broadcasting Handled)
• Also tested in Torino 2006 Winter Games, DVBH enables TV-watching on mobile phones
• It will also commercially available bundled with IPTV offers as “Alice Home TV” and “Rosso Alice”
Telecom Italia Sparkle: Proprietary & Confidential Information17
The New Drivers: The Post Convergence
Evolution of the fixed offerings► Broadband and IPTV► Telecom Italia launched Triple-Play Services on December 2005 (Alice Home TV)► TV Set Top Boxes► Fixed Full IP videotelephones
Evolution of the mobile offerings► Innovation, market segmentation and community targeted► Broadband: Wi-Bro, Wi-Max, Wi-Fi (with Dual Smartphones GSM-WiFi)► Mobile TV: DVBH, Wi-Fi Videophones
New Fix-Mobile convergent services► Mobile calls originated on selected sited with fixed tariffs► Fixed-Mobile Videocalls (fixed videophones adn UMTS)► Bi-Pack fixed and mobile phone bundle
Telecom Italia Sparkle: Proprietary & Confidential Information18
NEW CHALLENGES: DELIVER THESE NEW SERVICES ABROAD
FACT: we are living in a Post-Convergence market► New players enter the market to offer new services from the TLC market
outskirts► Traditional networks and services have already converged► Convergent services are already in evolution► Domestic operators need to extend their offers abroad as their customers
demands ubiquitous services
CONSEQUENCE: International Wholesale Service Providers role’s redefinition
The new challenge is to develop a wholesale product set to extend these new services abroad
TI Sparkle is prepared to follow this trends with its new service portfolio
Telecom Italia Sparkle: Proprietary & Confidential Information19
TI SPARKLE ANSWER:
A GLOBAL PORTFOLIO FOR OPERATORS AND CORPORATES’ NEEDS
Voice
Data & IP
Mobile
Corporate
Consulting
Global termination Wholesale VOIP Prepaid cards Premium Services
Global IP connectivity Managed Bandwidth
on bilateral and proprietary networks
SeaMeWe4 and Palermo Gateway
Restoration and Protected Solutions
Innovative security services
Network, NGN, Technology
Marketing & VAS Management &
Organization
Voice Signaling, GRX MMS, SMS Hubbing Mobile VAS←Roaming Enhanced
Services
Managed Bandwidth, Frame Relay
MPLS IP-VPN VOIP, Internet access and
Multimedia Mobility solutions ICT vertical solutions B-end access solutions
Telecom Italia Sparkle: Proprietary & Confidential Information20
provided by an IP based integrated multiservices network which guarantees the requested QoS level
Voice Wholesale
Integr. Multimedia Services for
MNcs
IP & BandwidthWholesale
TI Sparkle: The Post Convergence Intl. Wholesale Carrier
1.Bandwidth Man. Bandwidth/IPLC Hard-Patched Transit FE / GE access
2.IP Transit IPv6 LAN-to-LAN DDOS mitigation (S@fe) Virtual NAP
1.Bandwidth Man. Bandwidth/IPLC Hard-Patched Transit FE / GE access
2.IP Transit IPv6 LAN-to-LAN DDOS mitigation (S@fe) Virtual NAP
1.IP-VPN / MPLS Intranet + Internet
data Data + Voice (on-
net, off-net) Multicast capability VPN access on LL /
X-DSL VPN access via dial-
up ed Internet CPE Provisioning
and Management Security Features
2.Frame Relay
3.International Leased Circuits
1.IP-VPN / MPLS Intranet + Internet
data Data + Voice (on-
net, off-net) Multicast capability VPN access on LL /
X-DSL VPN access via dial-
up ed Internet CPE Provisioning
and Management Security Features
2.Frame Relay
3.International Leased Circuits
1.Int. Termination IDD and ISDN HCD - ITFS
2.Voice over IP H.323, SIP based Multiple voice coding
scheme White Label VoIP Class
5 services
3. VoIP Peering Services
4. Transit Traffic Hubbing Traditional transit
5. Int. Prepaid calling cards
1.Int. Termination IDD and ISDN HCD - ITFS
2.Voice over IP H.323, SIP based Multiple voice coding
scheme White Label VoIP Class
5 services
3. VoIP Peering Services
4. Transit Traffic Hubbing Traditional transit
5. Int. Prepaid calling cards
Services for mobile Operators
International Roaming
Enhanced signalling capabilities
SMS Antifraud GPRS roaming
(GRX) SMS Transit MMS Hubbing SMS Hubbing Mobile VAS Services Int’l Roaming VAS
Roaming Traffic Redirector
Outbound VHEmVAS Content Sol.
IPX/IPI
Services for mobile Operators
International Roaming
Enhanced signalling capabilities
SMS Antifraud GPRS roaming
(GRX) SMS Transit MMS Hubbing SMS Hubbing Mobile VAS Services Int’l Roaming VAS
Roaming Traffic Redirector
Outbound VHEmVAS Content Sol.
IPX/IPI
MobileWholesale
*2007 Product launch*2007 Product launch*2007 Product launch*2007 Product launch*2007 Product launch*2007 Product launch*2007 Product launch*2007 Product launch *2007 Product launch*2007 Product launch*2007 Product launch*2007 Product launch
Telecom Italia Sparkle: Proprietary & Confidential Information21
Next Challenge: The Virtual Home Environment
Increase mobility of users
Every service needs a roaming feature or an extension abroad
The market is already asking not only to use abroad the same services but also begins to ask for the same QoS and same price as home
The International Operators will need to develop its portfolio to provide its customers a virtual home
environment, wherever the customers are.
TI Sparkle is ready.