Milano, Sunday, April 9, 2023

Tavola rotonda“Reti fisse: quali prospettive?”

Guido Garrone - Fastweb

Research Partner Program

Alcatel & Politecnico di Milano

Mercoledi’, 10 maggio 2006

PG. 2

15.94016.10716.20816.19916.41316.38516.302

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

2002 2003 2004 2005 2006E 2007E 2008E

Access Voice Dial-up Broadband Data Services

1.100

2.500

4.600

6.800

8.200

9.500

10.500

0

2.000

4.000

6.000

8.000

10.000

12.000

2002 2003 2004 2005 2006E 2007E 2008E

Italian Fixed-line Telecom Market

Italian Annual TLC Fixed Spend (€ Mln)

Italian Broadband Connections (‘000)

1%

+30%

-19%

-3%

-3%

2002-2005

CAGR%

+84%

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

2002-2005

CAGR%

PG. 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

PG. 4

Telecom Italia Retail71%

FASTWEB11%

Other OLOs5%

Telecom Italia Wholesales

13%

Market penetration and IPTV leadership

Market Shares of Total Broadband Market 2005 Broadband Penetration on Covered Market (Sept. 2005)

100% = ~ 6.8 Mln BB ConnectionsTI

FASTWEB

(*) FASTWEB Penetration on Areas Covered since 2000

(**) FASTWEB Penetration on Areas Covered since 2002

(***) Overall FASTWEB Penetration

(***)

(**)

(*)

100% = Number of households passed

Tin.itAlice

~ 20%

~ 21%

~ 17%

~ 9%

~ 6%All Other OperatorsSource:

FASTWEB’s estimates based on companies’ financial reports

TI Retail includes Tin.it customers since 1Q 2005

TI Wholesale includes Other OLOs

World second largest IPTV provider in terms of customer penetration …

…first for TV ARPU…

World IPTV Top 5 ranking list

4.0%

8.0%

12.0%

20.0%

31.0%

FranceTelecom

Telefonica Free FASTWEB PCCW (HK)

TV ARPU: 140 €/year

TV ARPU: > 300 €/year

* Customers with at least one pay-TV service/broadband customer base; Data at December 2005 except PCCW at June 2005

World IPTV Top 5 ranking list

IPTV pay subs penetration on

broadband customer base*

PG. 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 2000-2005 Over € 3,000 Mln

Metropolitan areas covered 113

Network extension 20,000 km

PG. 6

1 3 517 11 15

23

45 4657 64 69

78

112123

143158

179 186197 194

228

259

287

1Q2000

2Q2000

3Q2000

4Q2000

1Q2001

2Q2001

3Q2001

4Q2001

1Q2002

2Q2002

3Q2002

4Q2002

1Q2003

2Q2003

3Q2003

4Q2003

1Q2004

2Q2004

3Q2004

4Q2004

1Q2005

2Q2005

3Q2005

4Q2005

2000-2005: Revenue* Growth and Milestones

Jan 2000: First business

customers

Oct 2000: Consumer

services launch

Mar 2001: VoD services launch

May 2001: Nationwide

service expansion

July 2001: xDSL service

launch

Nov 2001: Access to Socrate and € 955 Mln

financingNov 2002:

Videocommunication service launch

Sept 1999: Foundation

Mar 2003: VoD over ADSL

launch

June 2002: EBITDA

breakeven

* Revenues from Italian operations (€ Mln) - Pro-forma figures equal to Group revenues net of HanseNet revenues

Aug 2003: Full TV over ADSL launch

Dec 2004: Merger between e.Biscom and FastWeb and change

of company name in FASTWEB

Feb 2005: € 800 Mln Rights Issue

PG. 7

Convergences

IT

NETWORK

FIXED &

MOBILE

ACCESS

CONTENT &

MEDIACONSUMER

ELECTRONICS

VIDEO

PORTALS

ASP

ULL

MVNO

PG. 8

National Network Development

4.000.000 homes passed

18% of population

304 Central Offices in ULL

14 Metro Areas

15.600 km cable infr.

EOY2004+ 140%

1H2006

9.560.000 homes passed

45% of population

827 Central Offices in ULL

130 Metro Areas

21.500 km network infr.

3 Bln € of investments since 1999 for creation of own infrastructure

PG. 9

FASTWEB Broadband Network:Streamlined Architecture and Protocols

Fiber infrastructure Copper

DWDM

Physical Media

Transport

Voice, Video, Internet, VPNs, VAS

IP

Services

PG. 10

GR

FOPCPR MORE

AL

NO

BG

TO

BO

GE

RM

NA

MI

FIBA

RE

VRBG

GR

FOPCPR MORE

AL

NO

BG

TO

BO

GE

RM

NA

MI

BA

RE

PD

Customer CPE

Access

B/Bone

Customer CPE

Access

B/Bone

How is triple play possible on an all-IP Network?QoS enforcement: end-to-end requirement

Best Effort

Data Hi

Voice

Video

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

PG. 11

GR

FOPCPR MORE

AL

NO

BG

TO

BO

GE

RM

NA

MI

FIBA

RE

VRBG

GR

FOPCPR MORE

AL

NO

BG

TO

BO

GE

RM

NA

MI

BA

RE

PD

Customer CPE

Access

B/Bone

Customer CPE

Access

B/Bone

How is triple play possible on an all-IP Network?QoS enforcement: end-to-end requirement

Best Effort

Data Hi

Voice

Video

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 IdentificationTraffic Matching

Per Hop Behavior EnforcementCongestion Avoidance/Congestion ManagementMarking mantenance, extension, modification

PG. 12

Agnostic Access

Customer Site

Residential/SME FTTB - FTTH Customers

MiniPoP

BackboneLayer

AccessLayer

GigabitEthernet

GigabitEthernet

FTTO Top/Medium Business Customers

STM16 STM16

ResidentialConcentration

Layer

ResidentialAccessLayer

Point of Presence

Residential/SME xDSL Customers

MetroEthernetOr SDH Link Central Office

Wi Max

PG. 13

FTTx

xDSL

Internet/

VPN

Broadcast TV

Video on Demand/VCR

Video CommVoice

Agnostic Access

Full parity in services offered on both access technologies, to both Business and Residential Customers

Same Customer experience, different technology-dependent implementations

PG. 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)

PG. 15

Fastweb’s NGN architectures evolutionPhase 0: IP Backbone IP Creation

IP Backbone

PG. 16

Fastweb’s NGN architectures evolution Phase 1: VoIP Infrastructure Creation

IP Backbone

H323 GW

H323 GW

H323 GW

H323 GK

H323 GK

PSTN Domain

H323 GK

PG. 17

Fastweb’s NGN architectures evolution Phase 2: Application Layer Creation

IP Backbone

H323 GW

H323 GW

H323 GW

H323 GK

H323 GK

PSTN Domain

H323 GK

Customer DB

SoftSwitch IP Centrex ®UM

PG. 18

Fastweb’s NGN architectures evolution Phase 3: SIP Introduction

IP Backbone

SIP GW

SIP GW

SIP GW

SIP REG

SIP REG

PSTN Domain

SIP REG

Customer DB

SoftSwitch IP Centrex ®UM

PG. 19

Fastweb’s NGN architectures evolution Phase 4: Enhanced SIP Applications

IP Backbone

SIP GW

SIP GW

SIP GW

SIP REG

SIP REG

PSTN Domain

SIP REG

Customer DB

SoftSwitch IP Centrex ®

SIP GW

SIP

IP-PBX

SIP PHONE

SIP MULTIMEDIA TERMINALS

UMPresence FMC

PG. 20

Fastweb’s NGN architectures evolutionPhase 5: Domains Interconnection

IP Backbone

SIP GW

SIP GW

SIP GW

SIP REG

SIP REG

PSTN Domain

SIP REG

Customer DB

SoftSwitch IP Centrex ®

SIP GW

SIP

IP-PBX

SIP PHONE

SIP MULTIMEDIA TERMINALS

IP Domain

UMPresence FMC

PG. 21

WiFi Videophone

WiFi PC

Broadband evolution: a Wireless Home

GSM/WiFi Phone

WiFi STB

W-HiFi

PG. 22

Wireless Home: video distribution

Video Server

HAG

Access Point

WiFi MIMO

Wireless Bridge

WiFi MIMO

PG. 23

Wireless Home: convergence

Video Server

SoftSwitch

HAG

Telefono

GSM/WiFi

Access Point

WiFi MIMO

Wireless Bridge

WiFi MIMO

PG. 24

Service and Technology Evolution

ADSL 2+

20 Mb/s

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

1 Mb/s Upstream

Automatic upgrade for all ADSL customers free of charge (both ADSL and ADSL 2+)

New Full ULL Single/Double

Play Offer

No access fee, Broadband only, optional voice with FASTWEB phone at mobile tariffs

Fully Rechargeable

Option

Prepaid option not only for traffic, also for monthly fees

Replay TV

Last 3 days of TV programming available on demand

Wi-Fi Video

Complete Wireless Home Network

PG. 25

Service and Technology Evolution

HDTV

ADSL 2+ provides sufficient bandwidth

Monitoring real market demand FMC

IMS compliant network - simple integration with mobile services

Monitoring technology and regulation evolution

Wi-Max

Successfully trialled

Opportunity to further expand coverage – Nomadic and mobile applications?

Monitoring technology and licensing evolution

PG. 26

Service Platforms

Network InfrastructurePhysical InfrastructureTransport NetworkIP Network

CCSClass 5 S/S

OCSCIN SCP Messaging

SIPApp Svr

IPCentrex OCG

OM Portal DWH

IT Systems

Siebel SAP NetDB

NetworkManagement

SAS

ITO

Service Platforms & Systems

Provisioning

Billin

g

PG. 27

ipTV Service Infrastructures

PG. 28

Fastweb Labs

Test Plant

Apparati di utente residenziali

0

5000

10000

15000

20000

25000

30000

35000

2003 2004 2005

ANNI

TEST

Exponential volumes and complexity testing growth

• 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

PG. 29

The role of service, systems and processes

Customer SatisfactionCustomer Satisfaction

BSS &OSS

End-to-end processes management

Multichannel CRM

Quality and performance monitoring

SupportService

BSS &OSS

Content Richness

Enhanced Customer experience

Simplicity / Usability

Multi-Terminal/Environment Accessibility