1. Tavola rotonda “Reti fisse: quali prospettive?”
Guido Garrone - Fastweb
Research Partner Program
Alcatel & Politecnico di Milano
Mercoledi’, 10 maggio 2006

2. Italian Fixed-line Telecom Market
Italian Annual TLC Fixed Spend (€ Mln)
CAGR%
Broadband is the only fast growing segment in a broadly flat fixed telecom market
Broadband growth provides opportunity to gain share of other components of business and residential telecom spending (Access, Voice, Business data services)
Broadband connections should reach around 50% of market coverage by 2008 1%
+30%
-19%
-3%
-3%
Italian Broadband Connections (‘000)
CAGR%
+84%

3. Company profile
FASTWEB: an Italian worldwide-recognised pioneer in Broadband NGN Network Technologies and triple play services
Strong focus on
Service and Technology Innovation
Customer orientation
Business sustainability
Tight relations with primary Italian and international ICT competence centers
Technology Manufacturers Research Centers

4. Market penetration and IPTV leadership
Market Shares of Total Broadband Market 2005
Broadband Penetration on Covered Market (Sept. 2005)
100% = ~ 6.8 Mln BB Connections
100% = Number of households passed TI
~ 20%
Alice
Tin.it
~ 21%
(*)
FASTWEB
~ 17%
(**)
~ 9%
(***)
All Other Operators
~ 6%
Source:
FASTWEB’s estimates based on companies’ financial reports
TI Retail includes Tin.it customers since 1Q 2005
TI Wholesale includes Other OLOs
(*) FASTWEB Penetration on Areas Covered since 2000
(**) FASTWEB Penetration on Areas Covered since 2002
(***) Overall FASTWEB Penetration
World IPTV Top 5 ranking list
World second largest IPTV provider in terms of customer penetration …
…first for TV ARPU…
TV ARPU: 140 €/year
World IPTV Top 5 ranking list
TV ARPU: > 300 €/year
IPTV pay subs penetration on broadband customer base*
* Customers with at least one pay-TV service/broadband customer base; Data at December 2005 except PCCW at June 2005

5. FASTWEB’s numbers 2005 EoP Figures Home Passed 8,500k (= 40% coverage)
Customers
714k
Revenues
€ 967Mln
EBITDA
€ 305 Mln
Market Cap (current)
€ 3,250 Mln
Cumulated Investments
Over € 3,000 Mln
Metropolitan areas covered
113
Network extension
20,000 km

6. 2000-2005: Revenue* Growth and Milestones
May 2001: Nationwide service expansion
June 2002: EBITDA breakeven
Mar 2003: VoD over ADSL launch
Oct 2000: Consumer services launch
July 2001: xDSL service launch
Sept 1999: Foundation
Jan 2000: First business customers
Nov 2001: Access to Socrate and € 955 Mln financing
Aug 2003: Full TV over ADSL launch
Feb 2005: € 800 Mln Rights Issue
Nov 2002: Videocommunication service launch
Dec 2004: Merger between e.Biscom and FastWeb and change of company name in FASTWEB
Mar 2001: VoD services launch
* Revenues from Italian operations (€ Mln) - Pro-forma figures equal to Group revenues net of HanseNet revenues

7. IT Convergences NETWORK FIXED & MOBILE ACCESS CONTENT & MEDIA
CONSUMER ELECTRONICS
VIDEO
NETWORK
FIXED &
MOBILE
ACCESS
PORTALS
ULL
ASP
MVNO

8. National Network Development
+ 140%
EOY2004
1H2006
homes passed
18% of population
304 Central Offices in ULL
14 Metro Areas
km cable infr.
homes passed
45% of population
827 Central Offices in ULL
130 Metro Areas
km network infr.
3 Bln € of investments since 1999 for creation of own infrastructure

9. FASTWEB Broadband Network: Streamlined Architecture and Protocols
Services
Voice, Video, Internet, VPNs, VAS IP
Transport
DWDM
Fiber infrastructure
Copper
Physical Media

10. How is triple play possible on an all-IP Network
How is triple play possible on an all-IP Network? QoS enforcement: end-to-end requirement GR F O P C R M E A L N B G TO BO GE RM NA MI FI BA RE VR BG PD
Customer CPE
Access
B/Bone
In a packet network, different traffic components compete for shared communication resources
Each communication trunk and network element contributes to determine the overall quality level of services offered to the Customer base
QoS enforcement policies must be implemented in both the Backbone and Access Layers
Best Effort
Data Hi
Voice
Video

11. How is triple play possible on an all-IP Network
How is triple play possible on an all-IP Network? QoS enforcement: end-to-end requirement GR F O P C R M E A L N B G TO BO GE RM NA MI FI BA RE VR BG PD
Customer CPE
Access
B/Bone
Traffic Classification at the Edge (source)
Traffic Marking
IP (TOS Byte)
Ethernet (Tag Control Info)
MPLS (EXP Bits)
ATM (CLP Bit, ATM Class)
Forwarding classes Identification
Traffic Matching
Per Hop Behavior Enforcement
Congestion Avoidance/Congestion Management
Marking mantenance, extension, modification
Best Effort
Data Hi
Voice
Video

12. Agnostic Access Point of Presence STM16 STM16 Backbone Layer Access
MiniPoP
Wi Max
Gigabit
Ethernet
Residential
Concentration
Layer
MetroEthernet
Or SDH Link
Central Office
Gigabit
Ethernet
Residential
Access
Layer
Customer Site
Residential/SME FTTB - FTTH Customers
FTTO Top/Medium Business Customers
Residential/SME xDSL Customers

13. Agnostic Access
Full parity in services offered on both access technologies, to both Business and Residential Customers
Same Customer experience, different technology-dependent implementations
Internet/
VPN
Broadcast TV
Video on Demand/VCR
Video Comm
Voice
FTTx
xDSL

14. Networks and Services: Services evolution path
FASTWEB services evolution strategy
Network-centric Services and Applications
NGN network architecture (“a packet-based network able to provide services including telecommunication services and able to make use of multiple broadband, QoS-enabled transport technologies and in which service related functions are independent from underlying transport related technologies. It offers unrestricted access by users to different service providers. It supports generalized mobility which will allow consistent and ubiquitous provision of services to users”)
Smooth transition to the IMS model
Major building blocks
Platforms
Close integration of communication services (e.g. call control, user positioning and presence) with application logic
Dynamic management of Customers’ service profile
Integration with external applications (business partners) thanks to standard interfaces
Terminals
Commoditization (consumer electronics)
User friendly interfaces, easy customer access to multimedia services
Wireless connectivity
Integration with Service Platforms thanks to the use of standard protocols (IP, SIP)

15. Fastweb’s NGN architectures evolution Phase 0: IP Backbone IP Creation

16. Fastweb’s NGN architectures evolution Phase 1: VoIP Infrastructure Creation
IP Backbone
H323 GW
H323 GK
PSTN Domain

17. Fastweb’s NGN architectures evolution Phase 2: Application Layer Creation
IP Backbone
H323 GW
H323 GK
PSTN Domain
Customer DB
SoftSwitch
IP Centrex ® UM

18. Fastweb’s NGN architectures evolution Phase 3: SIP Introduction
IP Backbone
SIP GW
SIP REG
PSTN Domain
Customer DB
SoftSwitch
IP Centrex ® UM

19. SIP MULTIMEDIA TERMINALS
Fastweb’s NGN architectures evolution Phase 4: Enhanced SIP Applications
IP Backbone
SIP GW
SIP REG
PSTN Domain
Customer DB
SoftSwitch
IP Centrex ®
SIP
IP-PBX
SIP PHONE
SIP MULTIMEDIA TERMINALS
Presence UM
FMC

20. Fastweb’s NGN architectures evolution Phase 5: Domains Interconnection
IP Backbone
SIP GW
SIP REG
PSTN Domain
Customer DB
SoftSwitch
IP Centrex ®
SIP
IP-PBX
SIP PHONE
SIP MULTIMEDIA TERMINALS
IP Domain UM
Presence
FMC

21. Broadband evolution: a Wireless Home
W-HiFi
WiFi PC
WiFi Videophone
GSM/WiFi Phone
WiFi STB

22. Wireless Home: video distribution
HAG
Access Point
WiFi MIMO
Video Server
Wireless Bridge
WiFi MIMO

23. Wireless Home: convergence
HAG
Access Point
WiFi MIMO
Video Server
SoftSwitch
Telefono
GSM/WiFi
Wireless Bridge
WiFi MIMO

24. Service and Technology Evolution
Complete Wireless Home Network
Prepaid option not only for traffic, also for monthly fees
Automatic upgrade for all ADSL customers free of charge (both ADSL and ADSL 2+)
New Full ULL Single/Double Play Offer
Replay TV
ADSL 2+
20 Mb/s
1 Mb/s Upstream
Last 3 days of TV programming available on demand
40% of COs already equipped, 70% by June, 100% by December
Available for new and existing customers at a one-off extra fee, no monthly price differentiation
Wi-Fi Video
No access fee, Broadband only, optional voice with FASTWEB phone at mobile tariffs
Fully Rechargeable Option

25. Service and Technology Evolution
IMS compliant network - simple integration with mobile services
Monitoring technology and regulation evolution
HDTV
Wi-Max
ADSL 2+ provides sufficient bandwidth
Monitoring real market demand
Successfully trialled
Opportunity to further expand coverage – Nomadic and mobile applications?
Monitoring technology and licensing evolution
FMC

26. Service Platforms & SystemsOM
Portal
DWH
IT Systems
Siebel
SAP
NetDB
Billing
Provisioning
Service Platforms
Network Infrastructure
Physical Infrastructure
Transport Network
IP Network
CCS
Class 5 S/S
OCSC
IN SCP
Messaging
SIP
App Svr IP
Centrex
OCG
Network
Management
SAS
ITO

27. ipTV Service Infrastructures

28. Fastweb Labs Test Plant Full compliant network replica system
Fiber and DSL Residential and business access
System Test Automation triple play services
IP Backbone
Business e Personal SIP based Voice platform
UM platform
Voice IP-centrex
Video Infrastructure
Full compliant network replica system
Exponential volumes and complexity testing growth

29. The role of service, systems and processes
Support
Content Richness
Enhanced Customer experience
Simplicity / Usability
Multi-Terminal/Environment Accessibility
End-to-end processes management
Multichannel CRM
Quality and performance monitoring
BSS &OSS
BSS &OSS
Customer Satisfaction