Commsday 2013: How to Efficiently Transition to an All-Fibre Future

Robert CongerDirector, Product Management

October 9, 2013

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 2

Key Trends in Fixed Broadband Access

Cloud Connectivity

Residential Broadband

Data Center Connectivity

Mobile Services Expansion

Increased investment and competition

Multiple services over a common network:- Residential broadband- Cloud connectivity- Mobile backhaul

GPON and Vectored VDSL2 leading the way in telco markets

Success-based approach to incremental fibre investment

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 3

Typical Wireline Access Network

Pillar

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 4

Incremental Fibre Investment

~$350-$450 Per subscriber

$1,000-$2,500Per subscriber

$600-$1,250 Per subscriber

Aerial or Underground

Distribution Cable

Drop Cable

Copper

FTTDP Architecture (200-500+Mbps service)

Fibre

Distribution PointFTTCab Architecture (50-100Mbps service)

Fiber Aggregator

Aerial or Underground

Distribution Cable

Drop Cable

Feeder Fiber

CopperFibre

Cross-Connect Cabinet

$ $$ $$$

High Cost Area (last 1km)Common Network

Architecture+ $250-800 + $600-1,250

Drop Cable

FTTP Architecture (1Gbps service)

Fibre

• General industry trend is towards a success-based fibre build• Build networks on a common FTTx architecture and then make decision

on how far to invest with fiber vs. copper based on range of factors (competitive environment, service offering, deployment costs, etc.)

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 5

FTTx Deployment CostsUnderstanding Cost Variations for FTTP

Cross-box / Pillar

Key Factors Driving FTTx Costs:

– Greenfield vs. Brownfield– Aerial vs. Underground

Utilities– Construction Costs– Subscriber Density– Wiring environments:

SFUs vs. MDUs– Customer Sign-up Rates

Range of factors influence how far to

pull fibre into the network

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 6

GPON and VDSL2 Market Analysis

Strong growth in VDSL2 expected over next 5 years

GPON market still very targeted

GPON Revenue by Region: Q4 ‘12

Projected VDSL2 Growth by Region

Source: Infonetics Q4 2012 Broadband Aggregation Report

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 7

100 Mbps @ 550m with vectoring

Vectoring Gain

Vectoring eliminates Far End CrossTalk (FEXT) and allows service providers to deploy 100 Mbps out to >1 km over two pairs of copper

VDSL2 with VectoringMass-Market 100 Mbps Service Delivery

VDSL2 w/ Vectoring:– Latest generation copper

access technology for FTTN architectures

– Mass deployable technology in 2013

– Delivers 100Mbps out to >1km with 2pr bonding

– Enables cost-effective and widespread delivery of 100M services

– Small form-factor DSLAMs optimized around vectoring coming to market

~75% of customers within 500m of node, 90+% within 1km

Note: Average ETSI market statistics

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 8

Historical FTTN Deployment Model: Large adjunct cabinets next to existing

cross-connect

Current FTTN Model: Small footprint electronics that minimize throw-away

construction costs

1m

Changing the FTTN Deployment ModelMinimizing Footprint and Constructions Costs

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 9

Optimizing FTTDP DeploymentsAbove or Below-Ground w/ Remote Powering

Solutions must be optimized for below-ground pits, curbside pedestals, or aerial drop

Vectored VDSL2 today and G.Fast in the future

Network powering and reverse powering to avoid local powering requirements

FTTDP solutions optimized for low-denstiy-environments

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 10

Deep fibre is making loops shorter….

And shorter…

CO/Exchange

Remote Terminal orStreet Cabinet

Small Form-factorsealed DSLAMs

Distribution Pointunder Footpath

Incremental FTTx Requirement: Solutions Optimized for Each Deployment Model

Incremental FTTx StrategySolutions Optimized for Each Part of the Network

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 11

GPON/NGPON

GigE

FTTH Deployment

Business Services

Metro Network

N x 10Gig lEthernet or OTN

GE/10GE or l

ServicesEthernet and Wavelength

Services

Small Cell Gateway

Bonded VDSL2

Solutions Optimized for Multi-Service Delivery:– Platforms built with a range of vectored VDSL2, GPON, GE, 10GE, and

wavelength service delivery options– Full network automation with zero touch provisioning– Integrated service assurance and optional redundancy for business and

wholesale service delivery– Elimination of multi-box solutions to deliver a mix of residential,

enterprise and backhaul services

Multi-Service SupportSolutions Must Support Full Range of Services

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 12

Summary

ExchangeRemote Node

Incremental Transition to FTTP

VDSL2

GPON

How to Efficiently Transition to an All-Fibre Future:

– Minimize throw-away construction costs and footprint associated with FTTN and FTTDP electronics

– Avoid “one size fits all” approach: utilize a range of solutions optimized for different deployment densities and locations

– Avoid multi-box solutions to support a range of enterprise, residential, and backhaul services

– Build out the network in a manner that is progressing towards long-term FTTP target architecture: incremental fibre investment, GPON-fed FTTDP ONUs, etc.

ADTRAN Company Confidential® Adtran, Inc. 2013 All rights reserved 13