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All Rights Reserved © Alcatel-Lucent 2009 Alcatel-Lucent Special Customer Operations Gabrielle Gauthey – Executive Vice-President Global Government & Public.

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Presentation on theme: "All Rights Reserved © Alcatel-Lucent 2009 Alcatel-Lucent Special Customer Operations Gabrielle Gauthey – Executive Vice-President Global Government & Public."— Presentation transcript:

1 All Rights Reserved © Alcatel-Lucent 2009 Alcatel-Lucent Special Customer Operations Gabrielle Gauthey – Executive Vice-President Global Government & Public Affairs Broadband Forum Poland, Warsaw November 24, 2010 Very High Speed in France & International BB Plans

2 All Rights Reserved © Alcatel-Lucent 2010 2 | Broadband Forum| November 24, 2010 - rh Agenda Very high speed broadband deployment: the French Case The Role of the Law The Role Regulation The Role of Public Policy – Local Authorities – Caisse des Depots – Grand Emprunt International Examples & Conclusion

3 All Rights Reserved © Alcatel-Lucent 2010 3 | Broadband Forum| November 24, 2010 - rh Very high speed deployment: the French Case High Speed Deployment in France – International Comparison OECD Average

4 All Rights Reserved © Alcatel-Lucent 2010 4 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Regulation: Combination of LLU and Bitstream (1) Competition through active infrastructures has been the main driver behind the development of broadband: Geographic extension of competition has encouraged France Telecom to equip all of its MDF (Main Distribution Frames) for ADSL France has joined European leaders in terms of penetration… …and is in good place for "triple play" Three major drivers have made this increase in investments possible: Dynamic operators, both incumbent and new entrants Regulation : LLU first, bitstream as a complement Local authorities intervention has been crucial in the expansion of broadband coverage Where do we come from in Broadband deployments?

5 All Rights Reserved © Alcatel-Lucent 2010 5 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Regulation: a Combination of LLU and Bitstream (2) Growth of the broadband access base (March 2010) 20022003200420052006 24Mb/s 8Mb/s 1Mb/s512kb/s 1st TV/DSL offer 1st telephony /DSL offer 1st fixed-mobile Convergent offer ADSLADSL2+ Evolution of broadband technologies and services 1st broadband/ DSL offer 1999… DSL coverage as of March 31 2010: 98% of the population 20072008/2009 FTTH 100 Mb/s 1st Very high speed FTTH offer

6 All Rights Reserved © Alcatel-Lucent 2010 6 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case The new FTTH: Three Public Policy Levers Legislative Lever – Loi de modernisation de leconomie – August 2009 Sharing of the fibre last drop through mandatory agreements between operators and landlords Right to Fiber Mandatory fiber pre-cabling for new buildings Regulatory Lever – Market 4 analysis of July2009 Asymmetrical regulation (duct access) Symmetrical regulation (last drop and in-house wiring) Public Policy Lever Caisse des Dépôts mandate Grand Emprunt Intervention of local authorites

7 All Rights Reserved © Alcatel-Lucent 2010 7 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Legislative Measures Adopted to Facilitate the Roll-Out of FTTH in the buildings The LME (Loi de Modernisation de lEconomie) adopted in August 2009 deals with the deployment of fiber and sharing of the last part of the local loop among operators: A right to fiber has been instituted in order to facilitate the roll-out of fiber networks inside the building In return, any operator that rolls-out fiber within a building has to give access to this fiber network to other operators: point of sharing is located outside the private property A contractual agreement necessary for the relations between property owners and operators – ARCEP issued a draft agreement In new buildings, pre-equipment standards have evolved to include fiber The LME sets the rule of symmetrical regulation, in anticipation of article 12 Framework Directive The LME grants ARCEP the power to define the technical and tariff related terms of the shared access and guarantee operators respect them

8 All Rights Reserved © Alcatel-Lucent 2010 8 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Regulation FTTH Roll-Out in Very Dense Areas ARCEP decision on FTTH deployments in very dense areas ( 5 Millions households) – After 2 years of consultations and field trials, ARCEP published its final decision on January 17th 2010; – Duct Reference Offer available; – Fiber flexibility point (« point de mutualisation », PM) is located in the public domain and by exception in the private domain for buildings with more than 12 flats; – Arcep encourages co-investment in the last drop (i.e. in the building): prior to installing fibers in a building, every operator must notify its plans to other operators who are entitled to request a dedicated fiber (and bear associated costs); – Last drop will be multifibre in case of co-investment and mono-fibre otherwise; – All operators have published their commercial reference offers.

9 © Alcatel-Lucent 2009 All Rights Reserved 9 | Capri Betweens Conference Oct 2010 Very High Speed Deployment: The French Case Regulation: FTTH roll-out in medium/low density areas Medium density urban areas represent around 10 Millions households and low density 10 million households Fibre Flexibility Points (FFPs) Last drop is shared from the flexibilty point till the end user First operator deploying in a given area builds the FFP FFPs concentrate a minimum of 300 fibres (average 1 000) Mono vs Multifibre In very dense areas, multibre is required at operators request In less dense areas, a single fibre is the general rule for the last drop Active equipment installation in the FFP Active equipment ( e.g. OLT, Ethernet switch) may be located at the FFP In case of technical or economical impossibility, FFP owner is required to provide dark fiber backhauling

10 All Rights Reserved © Alcatel-Lucent 2010 10 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Regulation: NGA - Active Infrastructure Competition Model Very dense areas : Fiber flexibility point at building basement by exception (if MDU has more than 12 DUs) Multi-fibre in the terminating segment (in-house wiring) in case of co- investment Duct access Less dense areas : Fiber flexibility point at cabinet level ( min 300 fibers) Shared mono-fibre in terminating segment and in- house wiring Duct access

11 All Rights Reserved © Alcatel-Lucent 2010 11 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Locating the Fibre Flexibility Point (FFP) Accomodates both Technologies There are technology-agnostic architecturesPositioning of the Fiber Distribution Point Operator 1Operator 2 Optical patch panel (Passive) Fiber Distribution Point Optical Network Terminals from operator Operator 1 streamOperator 2 stream Big Buildings Suburbs Rural areas

12 All Rights Reserved © Alcatel-Lucent 2010 12 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case NGA Roll-out in France – FTTH and FTTB deployments

13 All Rights Reserved © Alcatel-Lucent 2010 13 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case NGA Roll-out in France – ARCEP Figures as of June 31 2010 ARCEP estimates that, as of June 31, 2010 more than 4.5 million homes were located in an area where fiber has been rolled out in the access network. A total of 40 000 buildings – accounting for 980 000 homes) - are equipped with optical fibers and connected to the network of at least one operator. Of which 83 000 via fiber sharing agreement

14 All Rights Reserved © Alcatel-Lucent 2010 14 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Local Authorities Interventions in Telecom Infrastructures in the Past 10 years Legal form Mainly DSP (« concessions »); Choice by local authorities of one operator/delegator; Wholesale offers negociated with local authorities; Coverage imposed by local authorities; Maximum 70% subsidy (=> operational risk left to the private delegator); Network remains local authoritys property. Operating mode Graduation of intervention according to the density and the presence or absence of operators Passive infrastructures in denser areas (mainly open fiber backhauls) with the objective to connect a maximum of NRFs and wireless BTS Equipement of business parks; Activated whosesale offers in the less dense areas; In some rural areas : retail operators

15 All Rights Reserved © Alcatel-Lucent 2010 15 | Broadband Forum| November 24, 2010 - rh Other Selected Topics Open Wireline Backhaul key for both Mobile and Fixed Traffic Growth Typical telecommunications network architecture Role of backhaul networks: Cost effective coverage of medium and low density areas; Stimulate competition and innovation; Anticipate bandwidth demand increase for all access technologies (fibre, LTE, Wimax,…); Future proof investment for public initiatives particularly for local authorities; Enhanced connectivity for public services (schools, hospitals, universities,…) and business parks

16 All Rights Reserved © Alcatel-Lucent 2010 16 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Local Authorities have Played a Crucial Role in Broadband Coverage In recent years, local authorities have played a key role in the digital development of their regions in partnership with operators Arcep first impact assessment: – 86 projects – 60 of which are running – 2.7 billion invested (approx.50% public funds) Major consequences : – Less expensive coverage of rural areas – Expansion of LLU, and wireless coverage – Fostering of local operators development – Preparation of the future of FTTx

17 All Rights Reserved © Alcatel-Lucent 2010 17 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployment: The French Case Role of Local Authorities - Private Companies Operating Public Networks

18 All Rights Reserved © Alcatel-Lucent 2010 18 | Broadband Forum| November 24, 2010 - rh NGA roll-out : role of local authorities Their role could be decisive : Encourage the sharing of ducts when granting rights of way Lay ducts and rent them to operators Avoid inefficient duplication of basic infrastructure (ducts and even dark fibre) on reduced geographical areas which can be shared among operators Have a lever effect on private investments Promote the choice of a common optical loop topography by operators Ensure a fait opening of the new optical loop 29 registered local authorities engaged in FTTH roll-out

19 All Rights Reserved © Alcatel-Lucent 2010 19 | Broadband Forum| November 24, 2010 - rh Very High Speed Deployments: French case study Policy lever : Precautions for local authorities intervention Precautions taken to avoid concerns and risks mentioned in the recent US GAO Governmement accountability Office) report Competition distortion : Maps, agreements with existing networks, … long term investment sustainability : privately run networks handle networks interoperability : few wholesale providers, common standards implemented

20 Public broadband infrastructure projects Typical project structure Special Purpose Vehicle Public Contract Caisse des Dépôts30% Project sponsors70% Shareholders Local authority Other local authorities / subsidies Subsidies Equity Sponsor 1 Sponsor 2 Telco Operation & Maintenance Design & Build Client The Role of Caisse des Dépôts

21 All Rights Reserved © Alcatel-Lucent 2010 21 | Broadband Forum| November 24, 2010 - rh Very high speed deployment: the French Case Government Role Investment mandate to the Caisse des Dépôts French state loan: – 2 B for very high speed networks –Long terms loans in medium dense areas –Subsidies for rural areas – 2,5 B for content, application and services (Web2.0, e-health, e-government, gaming software, …) applications development

22 All Rights Reserved © Alcatel-Lucent 2010 22 | Broadband Forum| November 24, 2010 - rh Worldwide Trends and Conclusion EMEA AMERICAS Active infrastructure based competition prevails, favoring operators vertical integration – passive infrastructure sharing encouraged - bit stream wholesale being considered as a second best except in UK (VULA) EU Digital Agenda : universal bb coverage, bandwidth increase, national BB strategies required State Aid scope has been broadened for fiber networks in suburban and remote areas – may accelerate fibre PPPs APAC US : Stimulus funds allocated through RUS focus on unserved and underserved areas – mainly for middle-mile projects ( interstate backhaul networks) CALA : Broadband plans are heating up, focus on mobile open access and open backbones Functional separation (i.e. shared access) combined with bitstream wholesale and heavy regulation are leading network transformation (Singapore, Australia, NZ) aka NBNs – Open backbones in India. Testbed for next generation bitstream wholesale and virtual unbundling

23 All Rights Reserved © Alcatel-Lucent 2010 23 | Broadband Forum| November 24, 2010 - rh

24 All Rights Reserved © Alcatel-Lucent 2010 24 | Broadband Forum| November 24, 2010 - rh Public driven Initiatives A global trend French digital plan 2 B for very high speed BB roll-out in grey and white areas 2,5 b for services/applications FTTH roll-out regulation (geographic segmentation) Digital dividend release Digital Britain 2 Mb/s universal broadband access service in 2012 200 M£ NGA fund German Broadband Plan 100% bb coverage by end 2010 75% of hh access at 50 Mb/s by end 2014 Spectrum allocation for LTE + Draft bradband plans in Greece, Italy, Poland, Russia,... Chinas recovery plan 4 Trillion RMB 09-10 ICT included in pillar industries program India National Backbone 4,5 B fiber backbone 90% of population bb coverage by 2013 Australian National Broadband Network 100 MB/s to 90% of subscribers 43 B A$ ( 23 B) New Zealand Broadband Investment Initiative 1.5 B NZ$ investment plan announced in March 09 Connecting America Broadband Plan Foster competition, innovation and investments Ensure Spectrum availability Universal broadband service Develop broadbadn based services (e- health, e-education,...) Brazilian Plano Nacional de Banda Larga Connectivity for 50% of urban hh and 15% of rural hh 60 M mobile access 41 M $ capex (1/3 public, 2/3 private) Europes Digital Agenda EU countries to adopt national VHS broadband strategies 100% BB coverage in 2013 30 MBs connections for all in 2020 with 50% of EU citizens connected at 100 MBs

25 All Rights Reserved © Alcatel-Lucent 2010 25 | Broadband Forum| November 24, 2010 - rh Impact on unbundling 913 773 988 CO unbundling : alternative carriers backhaul networks CO unbundlig : alternative carriers backhaul networks + France Telecom dark fiber rental CO unbunling : local community bakchaul network 14,4 M households 2,4 M households 4,3 M households 21,2 M households Number of unbundled COs according to backhaul network ownership 40 % of French central offices are unbundled through Local Communities backhaul networks by end 2009

26 All Rights Reserved © Alcatel-Lucent 2010 26 | Broadband Forum| November 24, 2010 - rh Broadband Penetration by Technology

27 All Rights Reserved © Alcatel-Lucent 2010 27 | Broadband Forum| November 24, 2010 - rh Very high speed deployment: the French Case Rural Deployments in France Despite the homogeneous need of telecommunication services in rural and dense areas, there is a mismatch in BB deployment (PC penetration in rural zones is higher as PC penetration in intermediary zones): In rural zones Orange is clearly the dominant operator (market share of Orange inversly proportional to the size of the agglomeration), namely: 64% of the communities with less than 5000 inhabitants 34% in bigger communities 32% in Paris and Paris region Source: ARCEP 2010

28 All Rights Reserved © Alcatel-Lucent 2010 28 | Broadband Forum| November 24, 2010 - rh Very high speed deployment: the French Case Broadband Access Market Growth and Competition Situation July 2010: 20 M broadband connections (residential and professional services) of which more than 19 M in ADSL 10.3 M access lines commercialized by alternative operators, 7.14 millions total unbundling 80% of the competitive offers take advantage of full unbundling

29 All Rights Reserved © Alcatel-Lucent 2010 29 | Broadband Forum| November 24, 2010 - rh Selected Examples of Deployments in France (1) Fiber Backhauling Availability in Moselle Department Public Initiative backhauling network connect most of incumbents central offices to enable copper unbundling France Telecoms dark fiber offer (not regulated) is not available everywhere ( red : not available, black : available) France Telecom dark fiber offer is commercially driven. Its tariffs do not reflect a territorial digital policy. Its architecture serves FTs internal needs (central offices interconnexion) Public Initiative backhauling networks may connect business parks, business districts, company offices, public buildings, poles and masts where base stations require backhaul facilities ( 3G, LTE,…)

30 All Rights Reserved © Alcatel-Lucent 2010 30 | Broadband Forum| November 24, 2010 - rh Selected Examples of Deployments in France (2) Manche Numérique Backbone network (1200 km) managed as « affermage »/public concession by LD Collectivités (private company) Total cost: 79 M, of which: 24 M public sector (16 M from the Department) 2008 : FTTh extension to Saint Lô and Cherbourg : 12 M 100% private funding. Results : 40 business districts connected to fibre backhaul Unbundling of all incumbents central offices (6 competing operators cover 35% of the population; 2 competing opérators in all rural central offices) White zones wireless coverage: 4 M (210 WiFi spots) 26 000 FttH homes passed National operators presence : Neuf Cégétel, Colt, Complétel; Free Local operators : Nomotech, RMI Adista, Idylle Télécom


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