Ultra Fast Broadband update Graham Mitchell, Chief Executive Officer - PowerPoint PPT Presentation

Ultra Fast Broadband update Graham Mitchell, Chief Executive Officer TEL.CON12 17 April 2012

Topics for today: • Progress with deployment • Likely sources of demand • UFB opportunities for RSPs • International developments • Summary 17 April 2012 2

Deployment progress: Year 1 premises passed: 10% 19% 10% 61% • 14 urban centres underway • All urban centres underway during 2012-13 • Target 70K premises by 30/6 Images: Northpower Fibre, Whangarei; Chorus, Kelson 17 April 2012 3

Long term deployment view: Premises Passed by Segment Premises Passed by Partner (Cumulative) (Incremental per annum) 1,400,000 250,000 1,200,000 200,000 1,000,000 150,000 800,000 600,000 100,000 400,000 50,000 200,000 0 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 2018 2019 Priority Premises Non Priority Premises Passed Passed Notes: graphs show years to end June. 17 April 2012 4

Illustrative UFB progress: Penrose / East Tamaki / Manukau: Christchurch: UFB Year 1 & 2 Business Fibre ~60,000 end users, mostly businesses, can access UFB P2P & Dark Fibre on demand today 17 April 2012 5

Deployment consultation: • Local Councils: Successful consultation on Year 2 plans • Schools: All candidate areas commencing Year 2 • Health: DHBs consulted by Health IT Board, CFH and MED • Business: Focus on specific sectors & industry verticals Stakeholder consultation is ongoing & suggests growing momentum in UFB build will drive reasonable uptake 17 April 2012 6

UFB schools deployment: 100% 30.9% 451 1459 1500 Number of schools 34.4% 1200 502 900 18.2% 600 265 16.5% 300 241 0 Pre-UFB FY12 UFB FY13 Chorus Balance Total fibred plan (to 30 commitment to finish urban schools June) schools 17 April 2012 7

School usage of UFB: 17 April 2012 8

Digital Leadership Forums: Whangarei Purpose: Brings together local Auckland Tauranga Hamilton stakeholders on demand & supply side New Plymouth to realise UFB benefits Napier-Hastings Wanganui Objectives: To develop & execute a Nelson Wellington strategy to realise local economic Christchurch development goals using UFB Dunedin NOT EXHAUSTIVE Invercargill Digital Leadership Forum in action Digital Leadership Forum being Local communities are taking the lead in building explored/ instigated Other digital strategy initiative(s) programs to maximise UFB & RBI opportunities 17 April 2012 9

Likely sources of demand: Priority segments • WAN on fibre • Cost reduction Enterprise: SME: Government: • Strong CIO demand • WAN • VM-ware • VoIP • Centralising IT • Cloud apps & • Video conferencing back-up • GCIO • Collaboration • Remote working priorities • Cloud • WAN • Remote working • Imaging • Pent-up • 3G & LTE Health: Schools: Carrier: • VC • Non-Building demand • National data consultation Address • Aligned • e-learning Points • Network For • Community Health IT plan Learning Wi-Fi • SCADA 17 April 2012 10

Likely sources of demand: Residential Examples:  Higher speed Internet access Home VC, uploading media  Back-up & cloud based storage  Working at & from home  Extended school learning  Advanced gaming  Real-time entertainment  Home security Home Monitoring & Control 17 April 2012 11

In the Home: Video is changing • Netflix Movies: 33% of US peak download • HBO Go app hits 1 million downloads in first week • OIPF TV Browser, supported by all major TV OEMs • AT&T/Cisco release of wireless set-top box – no more cables ! 17 April 2012 12

Real-Time Entertainment dominating: • Asia-Pac: PPStream and PPLive together account > 37% of the upstream. • P2P file sharing and web browsing diminishing • Internet is being increasingly used as a broadcast entertainment medium 17 April 2012 13

US: Internet Peak now looks like TV peak • US daily maximum ~ 8:45 p.m. to 10:45 p.m. • Within 6 months peak period reduced from 2.5 to 2 hours • AsiaPac peak at 9pm to 11.30pm • Entertainment Video concurrency ratios much higher than internet UFB not contended, allowing high concurrency & quantity for video 17 April 2012 14

Data usage growing: Mean consumption Asia-Pacific Fixed Access Day Week Month Upstream 384.9MB 2.3GB 6.6GB Downstream 1.3GB 8.9GB 24.2GB Aggregate 1.7GB 11.2GB 30.8GB • Netflix user averages 40-80 GB/month (5-10 movies) • Growth entertainment driven – local • Locally hosted to minimise latency/cost Source: Sandvine Network Demographics, Nov 2011. 17 April 2012 15

Performance beyond the UFB PoI: Household ISP: UFB 100/50 Mbps • CIR ? PoI • Mbps ? 10/2.5 CIR <1ms • ms ? Household Corporate Office UFB Network RSP backhaul & cloud UFB Network delivers high quality; RSPs control experience beyond PoI 17 April 2012 16

Home wiring: Double play Home wiring should not be Copper Coaxial cable Ethernet Fibre an issue for most UFB users 17 April 2012 17

Case study: FiOS (USA) • FTTH 61% of consumer revenue: o 20% YoY growth in triple play o ARPU US$148+ • FiOS video: o 4.2m subscribers, 194 net adds o 32% penetration • FiOS Internet: o 4.8m subscribers, 201 net adds o 36% penetration Verizon FiOS continues to grow ARPU and share in highly competitive US market 17 April 2012 18

Case study: HKBN (Hong Kong) Net additions (‘000) Example plans: • 100Mbps plan: NZ$31/ month • 1Gbps plan: $42/ month • International speeds: 20Mbps • Wi-Fi hotspots free • Free mobile handset or retail Total market adds (31 Dec Y/E)* voucher. HKBN adds (31 Aug Y/E) Source: OTFA, Hong Kong regulator. In a highly competitive telco market, HKBN has 30% FTTP uptake & increasing profits. 17 April 2012 19

Case study: NBN Co retail plans Speed: (Mbps) 25 / 5 25 / 5 Cap: (GB) 200 120 Kiama, NSW: 26% uptake 50 peak, 70 off peak $64.94 Price: (A$) $74.90 • All local & • $30 of voice national calls calls • No set-up fee • $79 setup fee Features: • 24 month • 24 month contract contract • ABC iView, Fetch TV etc. zero- Willunga, South Australia: 29% uptake rated 17 April 2012 20

Summary: • Deployment advancing: – Substantial coverage by 30 June 2012 + 2013 – UFB P2P available now in most CBDs • All UFB networks activated mid-2012 • Opportunity for RSP differentiation: – Upstream from UFB – Packages – Applications / content • FTTH gaining momentum internationally 17 April 2012 21

Thank you! CFH contact: Rohan MacMahon, Strategy Director E: rohan.macmahon <at> crownfibre.govt.nz Ph: 09 912 1970 17 April 2012 22