Magyar Telekom technicalapproachfor broadbandaccess · (FTT(FTTH HHH)))) Extended bandwidth Optical...

Magyar Telekom broadband access approachPeter Janeck, Magyar TelekomNetworks 2006, 9 November,200601/12/2006, page 1

====!"§==Com=

Magyar Telekom technical approach forbroadband access

Peter Janeck

CTO, Magyar Telekom

Networks 2006 Conference

New Delhi, November 6-9, 2006

====!"§==Com=Magyar Telekom broadband access approachPeter Janeck, Magyar TelekomNetworks 2006, 9 November,200601/12/2006, page 2

Magyar Telekom areaMagyar Telekom areaMagyar Telekom areaMagyar Telekom area•GDP/capita (EUR): 6 631•Population (thousand): 7 797•# of fixed lines (100 habitants): 36,1

Budapest

Pécs

Miskolc

Szeged

Székesfehérvár

GyőrDebrecen

Szolnok

ZalaegerszegKecskemét

Baja

Kiskőrös

Kiskunhalas

SzigetvárMohács

Ózd Szerencs

Mezőkövesd

Békéscsaba

Orosháza

Szentes

Dunaújváros

Sopron

Berettyóújfalu

Eger

Gyöngyös

Jászberény

Karcag

Tatabánya

Esztergom

Salgótarján

Balassagyarmat

Biatorbágy

Cegléd

Gödöllő

Vác

Szentendre

Sziget-

Kaposvár

Marcali

Siófok

Nyíregyháza

Kisvárda

Mátészalka

Szekszárd

Paks

Szombathely

Sárvár

Veszprém

Pápa

Tapolca

Keszthely

Nagykanizsa

szentmiklós

Monor

MT technical approach for broadband accessHungary key economic and telco indicators

EmitelEmitelEmitelEmitel areaareaareaarea•100 % owned by Magyar Telekom

Reported revenues

grew by 5.4% to HUF 316 bn (EUR 1,154.7 m) in Q2/06

Reported EBITDA increased by 0.5% to HUF 124.7 bn

EBITDA margin of 39.5%.

PSTN lines Q2/06 2.131.000

Down by 4.6% compared to a year agoADSL lines Q2/06 417.791

More than 20% increase compared to Q4/05

Magyar Telekom already presents

Magyar Telekom PoP

Macedon iaMacedo n iaMacedo n iaMacedo n ia

Hu n ga r yHu n ga r yHu n ga r yHu n ga r y

C roa tia

Serbia

S lov enia

Bosnia -

H e rz egov ina

U kra ineMoldova

G reece

Bulga ria

R omania

Mo n ten eg roMo n ten eg roMo n ten eg roMo n ten eg ro

A lbania


Magyar Telekom PoP



C roa tia

Serbia

S lov enia

Bosnia -

H e rz egov ina

U kra ineMoldova

G reece

Bulga ria

R omania


A lbania


Magyar Telekom PoP



C roa tia

Serbia

S lov enia

Bosnia -

H e rz egov ina

U kra ineMoldova

G reece

Bulga ria

R omania


A lbania


Magyar Telekom PoP



C roa tia

Serbia

S lov enia

Bosnia -

H e rz egov ina

U kra ineMoldova

G reece

Bulga ria

R omania


A lbania


Low Internet and PC Low Internet and PC Low Internet and PC Low Internet and PC penetrationpenetrationpenetrationpenetration

Low mobility premium and Low mobility premium and Low mobility premium and Low mobility premium and high fixedhigh fixedhigh fixedhigh fixed----mobile mobile mobile mobile

substitutionsubstitutionsubstitutionsubstitution

Relatively small market Relatively small market Relatively small market Relatively small market size, strong fixed and size, strong fixed and size, strong fixed and size, strong fixed and mobile dependency mobile dependency mobile dependency mobile dependency

Low purchasing power and Low purchasing power and Low purchasing power and Low purchasing power and high telco/GDP spendhigh telco/GDP spendhigh telco/GDP spendhigh telco/GDP spend

Comparison of telecom Comparison of telecom Comparison of telecom Comparison of telecom spending as % of GDPspending as % of GDPspending as % of GDPspending as % of GDP

Germany ItalyAustria UK Hungary

GDPGDPGDPGDP per per per per capitacapitacapitacapita –––– purchasing purchasing purchasing purchasing power parity power parity power parity power parity (EUR)

2002 2003 2004 2005

Mobile**Mobile**Mobile**Mobile**

FixedFixedFixedFixed

3.2 bn. min.

4.7 bn. min.

FixedFixedFixedFixed----mobile substitutionmobile substitutionmobile substitutionmobile substitution(minutes, 2002-2005)

28,233,6

26,1

3,0

18,8

15,5

17,4

2,0

1,4

1,7

Germany UK Italy Austria Hungary

Fixed and mobile telecom Fixed and mobile telecom Fixed and mobile telecom Fixed and mobile telecom market size market size market size market size (EUR billion)

MT technical approach for broadband accessMarket features specific to Hungary

Mobile has grown rapidly, Mobile has grown rapidly, Mobile has grown rapidly, Mobile has grown rapidly, fixed line penetration has fixed line penetration has fixed line penetration has fixed line penetration has slowed, voice has slowed, voice has slowed, voice has slowed, voice has inevitably migratedinevitably migratedinevitably migratedinevitably migrated

6% 8%12%

16%20%

26%

31%

2002002002001111 2002002002002222 2002002002003333 20020020020044442002002002005555 2002002002006666 2002002002007777

17%

23%

29%

35%39%

43%47%

2002002002001111 2002002002002222 2002002002003333 2002002002004444 2002002002005555 2002002002006666 2002002002007777

2,3% 2,3%

3,1% 3,3%

4,3%

Internet penetration of Internet penetration of Internet penetration of Internet penetration of householdshouseholdshouseholdshouseholds

PC penetration of householdsPC penetration of householdsPC penetration of householdsPC penetration of households

Mobile premium price Mobile premium price Mobile premium price Mobile premium price decreaseddecreaseddecreaseddecreased

3332

3638

43

4850

58

36353537

34312836

3% 3%

-9% -8%

19%41%

61%

107%

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005

Q I.

2005

Q II.

2005

Q III.

-20%

0%

20%

40%

60%

80%

100%

120%Average mobile min cost

Fixed minute cost

Mobile price premium

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Subscriber (thousand)

27 452 27 81826 447

30 011

14 198

Germany UK Italy Austria Hungary


PSTN resellers

Pure-play VOIP providers

Core sources of competition

Pure-play mobiles

Alternative own network

providers

Mobile

Fixed

Internet

Data

CATV

Alternative integrated /

cost synergy providers

Mobile

Fixed

Internet

Data

CATV

Extended sources of competition

MT technical approach for broadband accessCompetitive landscape


54%

19%

27%

Magyar Telekom UPC Others

80%

11% 9%

Magyar Telekom Invitel Others

45,3%

33,3%

21,4%

T-Mobile Pannon Vodafone

MT technical approach for broadband accessMarket leadership in a highly competitive environment

Mobile Market Fixed Line Market

Broadband Market


MT technical approach for broadband accessMain trends impacting MT’s business.

BroadbandBroadbandBroadbandBroadband

MobilityMobilityMobilityMobility ServicesServicesServicesServices

Moving forwardMoving forwardMoving forwardMoving forwardfixedfixedfixedfixed----mobile convergencemobile convergencemobile convergencemobile convergence

and quadruple playand quadruple playand quadruple playand quadruple play

Growing internet penetration and Growing internet penetration and Growing internet penetration and Growing internet penetration and bandwidth demandbandwidth demandbandwidth demandbandwidth demand

Common strategy between TCommon strategy between TCommon strategy between TCommon strategy between T----CabelCabelCabelCabeland Tand Tand Tand T----Com for offering enhanced Com for offering enhanced Com for offering enhanced Com for offering enhanced

services (services (services (services (VoipVoipVoipVoip, IPTV, 3play), IPTV, 3play), IPTV, 3play), IPTV, 3play)

NGNNGNNGNNGNDevelopmentDevelopmentDevelopmentDevelopment

Wireless broadband Wireless broadband Wireless broadband Wireless broadband access solutions with access solutions with access solutions with access solutions with portable intelligent portable intelligent portable intelligent portable intelligent devices based on devices based on devices based on devices based on

IP/NGNIP/NGNIP/NGNIP/NGN

Multimedia services for Multimedia services for Multimedia services for Multimedia services for information, communication information, communication information, communication information, communication

entertainment, etcentertainment, etcentertainment, etcentertainment, etc

Mobile dominates voice marketMobile dominates voice marketMobile dominates voice marketMobile dominates voice marketMerging TMerging TMerging TMerging T----Mobile and Mobile and Mobile and Mobile and

TTTT----Com HungaryCom HungaryCom HungaryCom Hungary

Extend geographic coverageExtend geographic coverageExtend geographic coverageExtend geographic coverage

HighHighHighHigh----speed accessspeed accessspeed accessspeed accessIP network developmentIP network developmentIP network developmentIP network development


0000

500500500500

1 0001 0001 0001 000

1 5001 5001 5001 500

2 0002 0002 0002 000

2 5002 5002 5002 500

2005 2006 2007 2008 2009 2010

Lines (thousand)

Voice Total Voice Total Voice Total Voice Total - Target is to stop decline of

fixed voice

decreasing PSTN/ISDN lines decreasing PSTN/ISDN lines decreasing PSTN/ISDN lines decreasing PSTN/ISDN lines as the result

of external effects – competitors, mobile

and VoInternet substitution

ADSLADSLADSLADSL broadband access

NGN VoIP deploymentNGN VoIP deploymentNGN VoIP deploymentNGN VoIP deployment on broadband

access

MT technical approach for broadband accessForecasted fixed line development


MT technical approach for broadband accessBroadband customer evolution

� Targeted broadband customers at the end of 2008: 1.000.000� VoIP, IPTV and broadband gaming customers are also broadband access subscribers� MT VAS retail subscribers will take off and represent a significant portion of total

customer base: in year 2008 dual and triple players will be 15 % and 22 % of total access

3rd Party +

Corporate

DSL 1 million

Target

Thousand subscribers

535.000

864.000

662.000

336.000

26.000

116.000

239.000

11.00060.000

143.000

19.000

40.000

2005 2006 2007 2008

Broadband access

VoIP

IPTV

Gaming


MT technical approach for broadband access3play service delivery platform

MT’s 3play offer:� PSTN (later VoIP),� ADSL (512k, 1M, 2M)� IPTV with (44 channels + 400 films for VoD)

Magyar Telekom broadband access approachPeter Janeck, Magyar TelekomNetworks 2006, 9 November,200601/12/2006, page 10

====!"§==Com=

0,1 100101

Capacity[Mb/s]

LMDSPersonal Area

Indoor

Fixed Urban

Fixed

Nomadic

Pedestrian

Wal k

Fi xed

Wi MAX*

MobileWiMAX*

VehicleUrban

VehicleRural

High Speed

Vehicle

HSDPA*

WiFi*802.11

Wirel ess

MobilityWi re-

line**

ADSL

VDSL2

ADSL2+

UMTS*EDGEGSMGPRS

Flash OFDMIEEE 802.20

BlueTooth

DECT

GPON >>100 Mbit/s

MT technical approach for broadband accessFixed andwireless BB access technologies


MT technical approach for broadband accessApplied technologies and BB coverage

T-Com service area

T-Com BB service area

at the end of y. 2006

T-Com BB service area at

the end of y. 2009

2433 settlements

1 133settlements

Cca. 1 000settlements

1 000+ 300=1 300settlements

Rollout plan:

Wireline BB solutions

Settlements that cannot be served from business interest

Conceptually taken as for wireline BB solution

Developments funded with governmental or EU finance.Wireline or wireless solution is selected case by case.

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

800 000

900 000

1 000 000

2007 2008 2009 2012

ADSL ADSL2+ VDSL2 GPON

AvailabilityAvailabilityAvailabilityAvailability ofofofof technologiestechnologiestechnologiestechnologies VolumeVolumeVolumeVolume andandandand breakdownbreakdownbreakdownbreakdown

BroadbandBroadbandBroadbandBroadband coveragecoveragecoveragecoverage

20072007200720072006200620062006 2008200820082008 2009200920092009 2010201020102010

ADSL2+ADSL2+ADSL2+ADSL2+

VDSL2VDSL2VDSL2VDSL2

EthEthEthEth. SHDSL. SHDSL. SHDSL. SHDSL

GPONGPONGPONGPON

WiMAXWiMAXWiMAXWiMAX

WLANWLANWLANWLAN

HSDPAHSDPAHSDPAHSDPA

InInInIn pilot pilot pilot pilot phasephasephasephase ApplicationApplicationApplicationApplication

20072007200720072006200620062006 2008200820082008 2009200920092009 2010201020102010

ADSL2+ADSL2+ADSL2+ADSL2+

VDSL2VDSL2VDSL2VDSL2

EthEthEthEth. SHDSL. SHDSL. SHDSL. SHDSL

GPONGPONGPONGPON

WiMAXWiMAXWiMAXWiMAX

WLANWLANWLANWLAN

HSDPAHSDPAHSDPAHSDPA

InInInIn pilot pilot pilot pilot phasephasephasephase ApplicationApplicationApplicationApplication


� The focus is on the continued expansion of broadband access to exploit fixed network’s broadband capabilities.� Broadband development will serve objectives of IPTV (3play) and the multi-service NGN deployment.� Mass market broadband demands will be served on the basis of ADSL and next versions: ADSL2, ADSL2+, VDSL2.

MT technical approach for broadband accessDSL ranges and loop length distribution


• Building optical transport nearer to the user aims- accomplishing coverage to white spots and to solve real estate limits;- increasing bandwidth demands by new DSL standards, ADSL2/2+/VDSL2 having shorter range

• Implementing DSLAMs at different nodes on a cable-route causes interference problems. Avoiding disturbances needs careful planning and spectrum management.

• In long term optical deployment towards user endpoints is the general direction.FTTFTTFTTFTT----

CentralCentralCentralCentralOffice Office Office Office

FTTPFTTPFTTPFTTP(FTT(FTT(FTT(FTTHHHH))))

ExtendedExtendedExtendedExtendedbandwidthbandwidthbandwidthbandwidth

Optical Optical Optical Optical „„„„depthdepthdepthdepth””””

TechnologyTechnologyTechnologyTechnology

FTTNFTTNFTTNFTTN(FTTC(FTTC(FTTC(FTTC/B/B/B/B))))

ADSLADSLADSLADSL ADSL2/2+ADSL2/2+ADSL2/2+ADSL2/2+VDSL2VDSL2VDSL2VDSL2

ADSLADSLADSLADSLADSL2+ADSL2+ADSL2+ADSL2+1G PON1G PON1G PON1G PON

EFMEFMEFMEFM----FibreFibreFibreFibre100M/1G P2P100M/1G P2P100M/1G P2P100M/1G P2P

InitialInitialInitialInitialbroadbandbroadbandbroadbandbroadbandcoveragecoveragecoveragecoverage

A A A A rrrréééézhzhzhzháááállllóóóózatzatzatzatrrrréééészlegesszlegesszlegesszlegescsercsercsercserééééjejejeje

Full optical Full optical Full optical Full optical solutionsolutionsolutionsolution

Extended Extended Extended Extended broadband broadband broadband broadband coveragecoveragecoveragecoverage

Present Present Present Present statusstatusstatusstatus

NearNearNearNear----term term term term goalgoalgoalgoal

MT technical approach for broadband access

Phases of wireline BB access network deployment

MidMidMidMid----term term term term goalgoalgoalgoal


WiMAX can be used in the following frequency bands:• license exempt frequency band (5.8GHz,expected in 2007) • licensed frequency band (3.5 GHz) → greater range, higher availability and quality, lower interference→ suitable for guaranteed services (QoS)

High capacity: aggregated rate of one base station can supply about 700 ADSL equivalent subscribersLine of sight is not required → ease and freedom of installation

UMTS/

HSxPA

WiMAX

Urban

Suburban

Rural

WiMAX

implementations have

to be harmonised with

UMTS/HSxPA roll-out

WiMAX is to be used

where copper network

is not available / not

economical


WiMAX is a new, promising wireless broadband access technology


WiMAX expected pay-back

WiMAX can be utilized economically • in T-Com areas with low ADSL availability*;• broader opportunity of usage in LTO areas but possibility of

unbundling have to be taken account

Source: WiMAX Forum


Economical considerations for WiMAX application

ACF: Accumulated Cash Flow

ADSL availability: penetration and conditions of copper network for ADSL

implementation

� Despite of price drops, current prices of WiMAX equipment still prevent from positive short term

business cases for incumbents . Current and estimated specific CAPEX is EUR 650-850/customer

Source: EURESCOM P1554 (January 2006)

Accumulated cash flow

-30

-20

-10

0

10

20

30

40

2007 2008 2009 2010 2011 2012 2013 2014 2015

Year

Accumulated cash flow [million Euro]

GSM+Fixed

UMTS+GSM+Fixed

Fixed only

New entrant

Operator Competencies


MT technical approach for broadband accessWiMAX -Technological system built-up& working services as March 2006

WiNET

KLIP

MT 3,5 Ghz freqency:

3462,5 - 3476,5 MHz3562,5 - 3576,5 MHz

WiMAX Micro Base Station2 channels, DC

Sectorial ANTENNA

60 ; 90 ; 120° ° °

WiMAX Base StationOutdoor Unit

WiNET

KLIP

MT 3,5 GH freqency:

3462,5 - 3476,5 MHz3562,5 - 3576,5 MHz

VoIP IP PHONE

Ethernet

WLAN 802.11g

CPE Outdoor Unit withIntegrated ANTENNA

CPE Indoor UnitNetworking GatewayWireless

CPE Indoor Unit1*ETH



VoIP IP PHONE

CAT 5

Ethernet

WLAN 802.11g

VoiceGateway

POTS

1..8

POTS

1..8

CISCO 2650

Ethernet

WiNET

WiTALK

IVD3

IVD4





MT technical approach for broadband accessOverview of ADSL Node and NodeB locations in the country

BlueBlueBlueBlue dots are the existing ADSL Nodes (2006)

RedRedRedRed dots are the new ADSL Nodes (2010)

PurplePurplePurplePurple blocks are the NodeBs in y.2010

Conclusion: Access methods for BB connections should be selected case by case,

area by area, based on economic considerations. Fix-mobile convergence

for incumbents is key for future success.

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