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23.11.2009 streng vertraulich, vertraulich, intern, ffentlich Autor / Thema der Prsentation 1 Current expectations on Evolution of Traffic Volumes Tools to optimize use of current supply CITI: State of Telecom


  1. 23.11.2009 –streng vertraulich, vertraulich, intern, öffentlich– Autor / Thema der Präsentation 1 Current expectations on Evolution of Traffic Volumes Tools to optimize use of current supply CITI: State of Telecom 2010 – New York, October 15 th , 2010 Reinhard Wieck, Managing Director DT Washington Office* *With Thomas Grob and Miguel Vidal, DT Group Headquarters 1 Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 2 2010 EU broadband markets are fiercely competitive Investment in high-speed next generation networks –  Broadband retail prices in the Europe needs to catch up to achieve broadband EU have decreased targets drastically, driven by competition  EU ICT sector requires major  The average price paid for a investment in next generation fixed 49.63 fixed broadband service and mobile high-speed networks in 49.63 bundle (e.g. triple-play) the coming years declined by about 5 euro in 31.50  European Commission’s Digital the first half of 2010 while 26.65 31.50 Agenda sets ambitious targets for access speeds continue to 26.65 high-speed broadband availability increase 4.8% by 2020  Strong competitive forces acting on next generation  Investment in smart NGNs depends 1.2% fibre include cable and future upon network operators’ freedom to mobile internet (EU innovate and develop new business Commission, MEMO/10/ 424 models in line with EU competition Brussels, 20 September Japan USA EU Source: European Commission (2010) Source: IDATE/ 2009 and consumer protection rules 2010) Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 3 Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 4 2010 2010 QoS-Differentiation maximizes customer choice and The role of network operators is evolving enables efficient network usage 1 Telco networks have a long history of securely managing their History networks and differentiating services. Stylized concept of future capacity allocation Network congestion is an everyday phenomenon during peak 2 hours. Over provisioning of capacity is no longer a sustainable Today business model. 3 Service differentiation and guaranteed E2E-QoS has been identified as a Interactiv promising source of further innovation and market growth. Gbit/s e Quality- Multimedia 4 The complexity of the Internet will continue to increase as today’s QoS: sensitive In the Future separate networks migrate to the Internet. guaranteed Services Given the current growth rates global data traffic will grow by a transmission SaaS 5 parameters factor of 44 until 2020. Just making the network faster will not be Traffic Flow sufficient. Intelligent traffic management is crucial to guarantee secure, 6 Quality- Best effort: reliable, robust, efficient, time relevant and/or privacy-safe a bit is a bit insensitive services. - no guarantees is a bit… Services Innovation in services needs to be supported by high levels of - equal treatment 7 investment and innovation in underlying networks. 8 All players in the Internet value chain need to contribute their fair share 1AM 12PM of network investment to enable further growth & innovation. Network operators will play a key role in the “all IP world”. Enabling Internet players through commercial offers of standardized network capabilities is the way forward. Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 5 Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 6 2010 2010

  2. 23.11.2009 –streng vertraulich, vertraulich, intern, öffentlich– Autor / Thema der Präsentation 2 DT Key Messaging in the EU Consultation on NN Telcos have a number of unique digital assets that could be efficiently used as enablers, QoS being one of them.  Deutsche Telekom is committed to the Open Internet and to “net Top-level View freedoms”. The introduction of QoS-differentiation supports these goals. Content Commerce Communication  Today’s “best effort” internet will continue to exist in a managed NGN  Customer transparency will be the key to success in the market place  Regulatory intervention in competitive markets would create distortions Service Enabler-based Service Service Creation &  The current EU regulatory framework safeguards the Open Internet Service Delivery Composition Exposure … Execution  QoS-differentiation and price differentiation will contribute to financing Address Presence and Device User Profiling the roll out of broadband infrastructure Book Location Management Application enablers Personal Recom Search Calendar  Competition will not only lead to better quality and individually tailored … Storage -mendation offers but safeguard a diverse and affordable internet experience Authenticati Network Session Distribution on and QoS … enablers Control Control Authorization Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 7 Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 8 2010 2010 The 2010 German spectrum auction Starting position  On April 12, 2010 the German regulator (Bundesnetzagentur, BNetzA ) started the auction The 2010 German spectrum auction – of additional spectrum for the German mobile telecom market  A total of close to 359 MHz was being offered, which actually exceeded the current total of An example of optimizing the use of current available spectrum in the market. More precisely: 41 blocks of overall 358.8 MHz of spectrum supplies spectrum split between four bands (60 MHz around the 800 MHz band, 50 MHz (1.8 GHz band), 58.8 MHz (2 GHz band) and the largest part of 190 MHz around the 2.6 GHz band)  Auction participants were the four established network operators: T-Mobile , Vodafone , O2 (Telefonica) and E-Plus (KPN)  The BNetzA emphasizes competition aspects : (i) spectrum allocation via auction means choosing a competitive mechanism; (ii) and this is a pre-requisite to provide unrestricted internet access under competitive conditions  Spectrum in the 800 MHz band ( ‘digital dividend’ ) received a lot of attention due to its very good propagation characteristics and its suitability for the roll-out of mobile broadband in rural and other hard-to-reach areas  Operators acquiring spectrum in the 800 MHz band are required to prioritize the coverage of rural areas , to fulfill the government’s promise of nation-wide broadband internet coverage  Germany was the first European country to auction off the digital dividend => creates first mover advantage Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 9 Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 10 2010 2010 Results of the German spectrum auction Spectrum auctions – lessons learned from the 360 MHz awarded for € 4.4bn German auction  Link political goals (national broadband plans, white spots coverage) and commercial goals (more bandwidth for mobile SPECTRUM WON BY OPERATORS Internet) AND PRICE PAID PER BAND  Get competitive first-mover-advantage by insisting on timeplan for spectrum auctions  Create strong political support from all stakeholders for efficient use of spectrum  Create win-win situations for both broadcasters and telcos  Enhance competition by use of state-of-the-art spectrum auctions  Spectrum caps  Increase efficient use of spectrum through realistic build-out requirements -- avoid spectrum warehousing Price paid (per operator): T-Mobile € 1.30bn, Vodafone € 1.42bn, O2 € 1.38bn, E-Plus € 284m Source: Cullen International, May 22 2010 Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 11 Reinhard Wieck, Managing Director, DT Washington Office / CITI State of Telecom 2010 October 15, 12 2010 2010

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