Voice of the Industry Marketing of FTTH Bob Whitman Vice President, Global Program Management Corning Cable Systems

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Marketing of FTTH Networks Considerations for Success

Business model Purpose of the Network Objectives Desired Actions/Outcomes Audience/Customer What Do They Want Rollout Phase Tailor the Message

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FTTH Still Early in Adoption Cycle Telco Broadband Messaging Shifting from xDSL to FTTH

0

50

100

150

200

250

300

350

400

450

2001 2004 2007 2010 2013E 2016E 2019E 2022E 2025EDSL Cable FTTB FTTH

Subs

crib

ers

(M)

2011 2015 2020 2025 FTTH subs (M) 50 120 290 400

Global broadband subscribers by technology

Source: Infonetics, Heavy Reading, Corning Analysis

Forecast History

FTTH subscribers by region

Subs

crib

ers

(M)

0

10

20

30

40

50

60

70

2005 2010 2015

EMEA Americas APAC

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The Business Model Influences the Audience and Message

Investment Rationale

Telecom carrier self funds from existing cash flow or debt

Carrier investment supported through public incentives

Government builds and operates network

similar to utility

1. Ability to spend 2. Compelling business case 3. Motivated to spend 4. Positive regulatory environment

1. Carrier funding challenged 2. Motivation to spend 3. National interest

1. Social benefits 2. Economic development 3. Infrastructure payback

Examples

US BB Stimulus

Singapore

Carrier Funded

Public Supported

Public Utility

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Market FTTH Through All Stages Tailor the Message to Audience Against Your Objective

Objectives Audience • Gain approval (Franchise) to provide services • Approval of civil works (Permits) • Gain “Rights of Way” • Eliminate bureaucracy • Construct the network at low cost • Offer compelling services and create consumer

enthusiasm and pull through • Achieve high penetration and low churn • Maintain low operating cost

• Consumer • Community • City • Partners • Home Developers • Businesses • Policy Makers

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FTTH: Best Option in the Face of Competition Are You Prepared for Success? Quotes from Small and Large Telcos

“We had to stop our Marketing campaign because we couldn’t keep up with demand.” (Large Telco)

“Because we don’t have wireless, FTTH provides us with the best

opportunity to grow our business”. (Large Telco) “We had huge cash flow problems because FTTH demand was so high we

couldn’t afford to buy more ONTs.” (Small overbuilder) “Our broadband share drops from 50 percent to 20 percent when we

compete with DOCSIS 3.0.” (xDSL provider)

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FTTH Consistently Tops Consumer Surveys Satisfaction Reduces Customer Churn

Sources: Consumer Reports, 2009-2011, Sound & Vision Sep 2007, PC Magazine Aug 2008, ChangeWave, Jan 2012 Render Vanderslice, Sep 2011

Tech We Can't Live Without, Part I

RVA Sept 2011

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Marketing to the Consumer Utilizing Third Parties Perceived as Independent

Source: AVS Forum, April 3, 2008 Note: Screen Shots from Discovery Channel are uncompressed frame from each program in full-resolution using MPC with Dscaler5-IVTC.

Uncompressed HDTV from major FTTH service provider Compressed HDTV from major MSO

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Marketing to the Consumer Translating Carrier Value to the Consumer

Source: Verizon and Bell Aliant Public Statements

FTTH Value to Carrier Average Revenue per User $147 /month

Reduction in Trouble Calls 80%

Power Usage Reduction vs. DSL 38%

Churn Reduction and Voice Retention 1.5%

Annual Savings per Line ~ $100

Unplanned: Free Up copper for Maintenance TBD

Number reported “reboots” per month

Source: Render Vanderslice Sept 2011

FTTH Value to the Consumer • More reliable platform • Less downtime • Higher satisfaction

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Marketing FTTH Channels to Your Audience

• Direct – Letters, fliers (w/ phone bill), door hangers – Special website, video demonstrations, blog – Events (neighborhood parties, town hall

meetings)

• Relevant media – ads and articles – Local and regional newspapers – Consumer magazines (e.g., Sound & Vision) – Trade (e.g., FORTUNE) and business media

• Utilize third-party channels

– TV retailers – FTTH Council – Universities – Consumer Reports

Source: Ringgold Telephone Coop, Rochester Telephone Company, NBN Co Jan 2012, Verizon, FTTH Council

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Marketing FTTH Market Consumer Experience, Not the Technology

Search: Hong Kong Broadband

Search: “Verizon FiOS Commercial” Search: “Slick Sam Slade”

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Marketing to the Community Making the Community Your Ally

• Keep the community informed • Highlight benefits of FTTH • Emphasize job creation and

economic development • Advance notice about

construction

Source: Verizon FiOS Community Letter Feb 2006 NCC North Dakota

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Marketing to the Community Most Exciting Marketing Campaign in FTTH History

• Created a frenzy of community activity – Plan to reach 50,000 to 500,000 people – 1,100 communities responded – 200,000 individuals responded – Stunts included communities changing names, mayors jumping into

freezing lakes and shark tanks

• Best conceived plans can be impacted by traditional barriers – Marketing to the community doesn’t end after the “win”

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Marketing for Renters, Buyers and Landlords Value Perceived by All Groups

Source: RVA Render & Associates Oct 2006

$5,500

$4,318

$2,485

Average Price Estimate From Developer

Average Estimate From Consumers Who

Have FTTH

Average Estimate From Consumers Who Don't

Have FTTH

65.2%

93.0%

Home Owners

Home Renters

Home Sale Premium with FTTH Importance of FTTH Availability to Rent or Buy Decision

Source: RVA Render & Associates Dec 2007

Source: Verizon January 2012

Cable to the Home Fiber Fiber+Cat5e Cat5e Cat3 Maximum

Speed 1Gbps~ 100Mbps~ 10~100Mbps 10Mbps

Emblem

Source: Korea MIT 2005

Korea Certified Star Program

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Summary

• FTTH Has Many Marketable Traits – Bandwidth capability – Network reliability – Demonstrated success around the world – Proven economic benefits

• Marketing Campaigns

– Tailored to audience – Designed to drive action – Make the community and consumers your ally – Build excitement and enthusiasm

Thank You!