Ultra-Broadband Forum 20158-9 September 2015 | Madrid, Spain

Ultra-Broadband with FTTH and 10Gbps GPON at PCCW-HKT

Paul Berriman: Group CTO, PCCW-HKT GroupSeptember 2015

Sources: OFCA, MPA, Informa

Over 7.2M population, multi-lingual, mainly Chinese speaking

Highly developed broadband market with more than 2.28M accounts – >85% household penetration

World’s Highest IPTV Penetration Rate > 60% of Households

Mobile penetration over >230% with 5 LTE Networks, 2 merging

Over 99% Pay-TV household penetration

A “laboratory” & incubator to understand future TMT evolution

4 Pay-TV Operators, 5 Fixed Operators, 4 Mobile Operators

4.31 million Telephone Lines – 102% HH penetration

Hong Kong Leader in Technology and Competition

HKT’s FTTH Customers Achieving A.P.C.S.(1) of 106.7Mbps(2) in Q4 2014

0100200300400500600700800

0

20

40

60

80

100

120

2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3

Aver

age

Pea

k C

onne

ctio

nS

peed

(in

Mbp

s)

Commercial Launch of HKT’s Fiber Service in

June 2011 HK

T’s Fiber C

ustomers (K

)

Q4 2014Hong Kong 87.7 MbpsKorea 74.4 MbpsJapan 69.0 Mbps

(1) A.P.C.S. represents Average Peak Connection Speed

(2) According to Average Peak Connection Speed figure from Akamai Technologies

106.7Mbps537K Subs

HKT - Hong Kong’s No.1 in the World for Internet Speed – Q4 2014

Pay TVNumber 1

MobileNumber 1BroadbandNumber 1

• Biggest Broadband Provider with over 60% market share driven by quality, VAS and service bundling with PayTV/Fixed-line/Mobile

• Unrivaled coverage with over 98% homes passedMobile

IPTV

Broadband

Fixed-line

PCCW’s Quadruple Play Strategy has made us Market Leader in Fixed, Broadband and Pay-TV in HK

Fixed-lineNumber 1

Biggest Fixed Line Operator with stable market share over 68%

Success story of reversing fixed-line loss since 2H 2005

Acquisition of SUNDAY in 2005 and CSL in 2014 resulting in leading 31% market share 3G/4G Nationwide Coverage, with 15,000 public W-Fi hotspots integrated for

automatic offload Data revenues surging, highest mobile data usage and strongest TV/music content

• Took leadership of Pay TV market (>50%) in less than 4 years since launch with strong customer & ARPU growth through our IPTV system & content strategy

• World Leading IPTV Operator

Content Applications & Transactional Services

IP Core

EYE TAB

NOTEBOOKTV SCREEN

MOBILE

education

Access

City wide coverage

3G/ 42Mbps HSPA+4G LTE

Broadband

Fiber DirectNetvigator everywhere Home wireless

Enabling PCCW’s quad play of media and

other services on multiple devices, which

roam seamlessly over our broadband,

mobile and Wi-Fi networks

Valuable content and transaction revenue

growth via multiple access technologies for

a number of customer situations, devices

and experiences, fixed, wireless and mobile

PCCW’s 13 Year Broadband & Quad Play Strategy is still workingFrom Access ….to Content, Applications & Transactions

NOW TV : 12 Years of

Strong Brand, Content and Innovations

Bringing Sports to the

Local Community Like

It’s Never Been Seen Before

PCCW’s Content Quad Play Example -

Live Rights for 100% La Liga games

La Liga anytime anywhere over PCCW’s four delivery platforms

Professional Cantonese commentators

Innovative Network Personal Video Recording service (NPVR)

now Select replay service to watch already-played matches any time

La Liga

Beyond the first landing socket

…and facilitates Customer Media Management. Coming in, going out and within the home

1st landing socket

Fiber-to-the-Home Broadband Home Networking

HomeAutomation

HomeEntertainment

HomeMonitoring& Security

DigitalProducts& eHealth

Home IT Consultancy

Reinforcing our Quad Play Advantage

Speed, Mobility and Services

Increased Mobility

Incr

ease

d Sp

eed

Differentiate

Over15,000 hotspots Ubiquitous wireless platform

Auto Network Selector

Grow ARPU

1.5-8MADSL

100M

1000M

18MADSL2+

Netvigator Everywhere up to 450M

LTE-ALaunched

10G

30,50,100MVDSL2+

No. of Buildings High rise Low rise Villas

Total in HK 10,793 11,775 18,552With HKT PON 7,702 2,149 13,281 Exchange

Buildings 90

Rural FTTC Cabinets ~700

Fibre Roll-Out From HKT Exchanges, to Outdoor Cabinets and Customer Buildings

CCU

CWN

KGR

CYN

SKGLFS

TSI YLG

TMNTSW

SMTTWN

TYI FTH

SGS KCY

CSA

CLKTCW

KTNWFUABD

RBY

NPTETTWCI

LKTWTTQNR THTVTAADM

HHM

FLG MMH

OLK

TPCTPO

KSGKWG SHTFTN YCK

MOS

NTK

KTGYTGJBY

CWBLCK SSP

PKTMKK

POMLHK

SAK

JDNHHT

WTS

STN

SKO

PGC

YIG LMA

SKN

HLCSVB

DBY

TIOTLT

PBT

BMX

LAP

KPT

ALAALB

PKK

LCWSTKTKL

TKKHHG

CUY

TIETUM

TPM

KOT

TCG

WRD

SKW

Private High Rise 38% HH

Villa & Low Rise 17% HH

Home Ownership

12% HH

Public Housing33% HH

No. of Buildings High rise Low rise Villasin HK Total 10,793 11,775 18,552

with HKT PON 7,702 2,149 13,281

Population of HK > 7.2 MillionNo. of Households > 2.4 Million

Household Distribution in Hong Kong and HKT PON Deployment

Villa & Low Rise Buildings

Private High Rise

Public Housing

Home Ownership Scheme Buildings

• Market segmentation according to district, property value and customer ARPU

• HKT Premier district / customers:• PON charges based on actual implementation cost

• Services supported by dedicated Sales & Engineering teams

Hong Lok Yuen

Repulse Bay The Peak

Fairview Park

Premier Customer Segmentation in Residential Market

MassMass

HKT Premier

Premier RuralHigh-Rise

FTTB Coverage 87.1%

2012 2013 2014 2015

13%Closing the gap

7% is Islands, Remote and Isolated

- to be served by other high speed services including wireless

6% is Addressable Rural

100%

Our Path to Territory-Wide Fiber Broadband

Market Segment Service Provision Service Restoration Remark

HKT Premier T + 1 ~ 2 days T+ 0.5 day • Dedicated field services staff• Pre-sales site visit

Mass Market T + 2 ~ 4 days T + 1 day

T = Service Request Date

Services Pledge For FTTH Deployment

• Provide PON service to the yachts Hong Kong’s Marinas• Highly customized solution

- 1Gbps FTTY (e.g. 220 berths at Discovery Bay)- WiFi in the yacht- Detachable Connection

Fibre To The Yacht Deployment

FTTH-ready (81.8%)**

(supporting speeds up to 1000Mbps)

(as of July 2015)

FTTB-ready (87.1%)*(supporting speeds of up to

100Mbps)

1.5M or above (98%)

Wide Coverage of our Fiber Network

★ FTTB-ready means FTTH service can be available within 29 days of receiving a service order, building management access permitting

★ ★ FTTH-ready means FTTH service can be available within 4 days of receiving a service order

57144

226304

362419

462504 537

Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15

Continued Growth of Fiber Customers• Fiber-To-The-Home (FTTH) Service continued

to attract new customers and existing customers for service upgrade

• 537K customers enjoying FTTH service as of Jun 2015, grew 16% vs. Jun 2014

• Growing fiber customer base creates future upgrade opportunity to higher speed, higher price service plans

• 650K customers enjoying high speed service (FTTH and VDSL2) as of Jun 2015

(‘000)

Successfully Migrating Netvigator Customers to Higher Speed Services

Within 6 months of the availability of higher speed services in their building,

over 50% of Netvigator customers upgraded to the higher speed services

T T+1 month

T+2 months

T+3 months

T+4 months

T+5 months

T+6 months

% of customers with higher speed service

No. of months after network upgrade

Challenges for FTTH Deployment in Hong Kong

Inside customer premises blockage due to decoration or fixed furniture

Permit to build Solutions• Property developer with affiliated telecom background• Building Management Office (BMO) work permit • Work permit in village / private land – Fung Shui (風水)

• Dedicated Account Manager • BMO lobbying• Seek Regulator (OFCA) help

Technical Issues Solutions

• Building lead-in blockage

• Re-route lead-in cable

• Blockage due to in building trunking

• Open access panel• FTTDp / VDSL2

fallback

• Inside customer premises blockage due to decoration & fixed furniture

• Surface wiring• WiFi• Home Plug• FTTDp / VDSL2

fallbackExisting lead-in duct blocked by building Marble wall

Open Access Panel

Blockage due to structure

Surface Wiring using Angel Hair

• Improve customer acceptance of surface wiring• Improve PON installation success rate

Consists of a 0.9 mm fiber “micro‐drop” using matching coloured fibre The tiny micro‐drop and clear adhesive mounting system provides a nearly invisible surface routing of fiber Can be installed in the grooves between ceilings and walls, and vertical corners between walls – support sharp bending angle

“Invisible” surface fiber drop laying to resolve inside lead‐in or conduit blockage

Fiber-To-The-Dp

FTTDp as fallback solution for main outlet & inside conduit blockage

PSE & VDSL2 modem inside customer premises

22Exchange

OLT VDSL2 modemSplitter Pico ONU

PSE : Power Sourcing EquipmentDp: Distribution Point Customer Buildings

VDSL2 modem

Main outlet blockage

Fiber

Pico ONU

PSE

PSEInside conduit blockage

Inside conduit blockage scenario

Main outlet blockage scenario

Splitter

CopperCopper

Pico ONU installation inside cable riser of the building floor

Developer Approach for New Residential BuildingsTaking Integrated Services approach for all new

building developments

Blockwiring pre-provisioned with sockets

Mobile indoor & outdoor cell site coverage

Smart Living / Home Networking

WiFi provision (club house, car park and

etc.)

Copper + Fiber Blocking Wiring

Mobile IRS + Cell sites

Copper blockwiring - Star configuration

Horizontal truncking

First Landing Socket (Fiber + Copper)Secondary Sockets

Home networking / Wi-Fi coverage

So far, 20+ Installations by HKT

10G PON is Here!

HKT’s 10G PON Service Launch

Unleashing HKT’s Fiber-rich Network

2015 onward

Massive Passive Optical Network (PON) Deployment

2010 - 2014

Fiber-supported Copper

Pre - 2010

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

100Mbps

1,000Mbps

Bro

adba

nd S

peed

(M

bps)

HKT launched 10G PON Service on 3 August, 2015 10,000Mbps10G PON is Here!

CXOHome Office

Dream Home Office of the CXO

• A well-equipped home office enables you to work

• just as effectively as in a corporate environment.

Enterprise grade Quality system and services Voice and data security Seamless extension from office to home

Video drives bandwidth & 4K Ultra HD is Coming! ……then 8K Ultra HD !!

TV EvolutionDefinition Resolution Frames per second Bits per pixel Typical Bit Rate

Available in marketFull HD 1920 x 1080 25/30 8/10 10MbpsPseudo 4K UHD 3840 x 2160 25/30 8/10 20MbpsTrue 4K UHD 3840 x 2160 50/60 8/10 40MbpsNot yet available (likely to first appear with NHK at 2020 Tokyo Olympics)Ultimate 4K UHD 3840 x 2160 100/120 10/12 100Mbps8K UHD 7680 x 4320 100/120 10/12 200Mbps

4K Ultra HD Drives Bandwidth

4K Video Impact on GPON Internet Service – 1G v 10G GPONGPON OLT Port :

ONUONU2.5G total speed

IPTV trafficInternet traffic

No. of ONUs per PON tree 1 32 64

True 4K Video (40Mbps Streaming) over 1G GPON 2.46G 1.86G 1.22GTrue 4K Video (40Mbps Streaming) over 10G GPON 8.61G 8.01G 7.28G

25% simultaneous viewership of 4K Videos

50% simultaneous viewership of 4K Videos

Available Bandwidth Remaining For General Internet Traffic

Much More Headroom with 10G GPON even with 64 way Split !

No. of ONUs per PON tree 1 32 64

True 4K Video (40Mbps Streaming) over 1G GPON 2.46G 2.18G 1.86GTrue 4K Video (40Mbps Streaming) over 10G GPON 8.61G 8.33G 7.92G

10G GPON as Solution to overcome GPON Bandwidth Limitation

When introducing Ultimate 4KTV (100

Mbps) or 8KTV (200 Mbps), the present G-

PON network will no longer support both

1G Internet service and the video service. Share the same fiber infrastructure for GPON & 10G GPON Simple installation/migration by changing the ONU & STB at

customer premises OLTS0

Local FDP

Local FDP10G Line Card

Local FDP

ONU

Exchange

OLTS0

S3

Coupler ONU

10G

S2

Solution : Use 10G GPON to serve Ultimate 4KTV or 8KTV Customers

S3

S3

CustomerBuilding

1G

Approach : Use Coupler to ride on same ODN to support both G-PON and 10G GPON

Well developed penetration of our FTTH GPON services Leading Mobile Broadband service provider

TV Content, New Media and Quad Play Advantage New service offerings beyond connectivity (Smart Living,

eSmartHealth)

HKT’s Balanced Business Portfolio will Drive Future Growth

Hong Kong Leader in Technology and Competition

Ultra‐Broadband Forum 2015

Thank you