PIRELLI TELECOM CABLES AND SYSTEMS. Kevin Edward Riddett
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1 PIRELLI TELECOM CABLES AND SYSTEMS Kevin Edward Riddett
2 THE BUSINESS STRUCTURE Sales at December 31, 2000 (Euro mn) Employees: 5,802 Factories: 17 (6 shared) TELECOM 1,376 YoY +24.3% ROS 11.2% ROS w/o overhead 13.2% 100% Pirelli Optical Labs 100% 90% (Cisco 10% ) Telecom & Submarine Fiber Optical Syst. Cables PSTS NV 1, * 100% New Business Development (FTTX) *Value of production 2000: 147 mn Euro
3 PROFIT & LOSS Euro mn Net Sales EBITDA % on Net Sales EBIT % on Net Sales EBIT (w/o overhead) % on Net Sales 1, % % % 1, % % % Employees 5,802 4,726 Factories 17 17
4 CREATING VALUE IN A HIGH-TECH ENVIRONMENT Optical Labs Telecom Fibers & Cables Submarine Systems New Business Development Developing New Pirelli optical solutions Advanced Fibers New Components Confirming technological leadership Investing in Optical Fibers capacity Introducing new products: WideLight Fibers Ribbon Premises Cables Rapier OPGW Focusing on value added fibers: FreeLight, DeepLight. Exploiting international alliances Developing new products. Implementing a system solution FTTH solutions FTTX development Alliances Partnerships Investments
5 NETWORK TRANSFORMATION OVER 5 YEAR PERIOD Forecast Global IP and Voice Traffic, Petabytes per month (petabyte = bytes) Internet Voice In advanced markets, data has overtaken voice: e.g. AT&T US Network - Feb 1997 BT UK Network - December 1998
6 PAN-EUROPEAN AVERAGE FIBRE COUNT TREND 400 Average Fibre 350 Count 300 Regional/Metro New operators entering the network business (as CAP or Carrier s Carrier) installing HFC cables 50 0 Source: KMI+Pirelli ACTUAL FCAST Long Distance
7 NORTH AMERICA AVERAGE FIBRE COUNT TREND 250 Average Fibre Count 200 North American Market Fiber Count driven by higher counts in the metropolitan area deployments. All Markets Source: KMI+Pirelli ACTUAL FCAST
8 NEWPORT PIRELLI TELECOM CABLES AND SYSTEMS HARLOW BISHOPSTOKE LIVORNO F. CHAVANOZ MILAN ARCO FELICE CAVIMAR FOS PIRELLI TELECOM PLANTS SLATINA MUDANYA Cable Plants Optical Fibre Plants Fibre Optic Labs Submarine Cable Plant SURREY LEXINGTON WUXI TONGLING JAKARTA SOROCABA DEE WHY LA ROSA
9 TELECOM CABLES & FIBERS INTERNET PROTOCOL Broadband services expansion EXISTING OPTICAL NETWORK Narrow bandwidth ( last mile ) Low transmission speed Leading Fiber Management Solutions Provider for Long-Haul, Metro, Access and Premises Applications INNOVATIVES FIBERS FIBER TO THE HOME NEW CABLES END-USER IP (Internet) E-Commerce Broadband Services (voice +video+ data)
10 FIBER OPTICS INNOVATION STANDARD VALUE ADDED APPLICATIONS FreeLightTM Long-Haul, High Optical Power terrestrial systems DeepLightTM Ultra Long Distance Submarine systems SMR fibres NewLightTM WideLightTM New Product for High Performance Systems (Bit rates, Channel numbers) Regional/Metro Area (no dispersion compensation) FineLightTM Optical Access: Fibre To The Home (FTTH) Enhanced Versions will be made available to sustain the Next Generation of Systems
11 FIBER OPTICS Production and Development FTTH FineLight Polymer Fibre DeepLight NZD- SMFC Dispersion Managed Fibre Sequence FreeLight NewLight SMF FineLight WideLight Access, FTTH and premises Regional rings Terrestrial systems Submarine systems
12 LONG-TERM ADVANTAGES OF FREELIGHT Initial underground system installation at 10Gb/s. 50% fibers equipped in one cable. FreeLight: no limits to upgrade at lower system cost per bit! 1.2 Overall cost in 10 years optical cable compensator regenerator amplifier Tx/Rx transponder 0 SSMF FreeLight Advantages increase as more fibers are equipped.
13 PIRELLI OPTICAL LABS Pirelli Optical Labs (POL) mission is the research and development of new technologies and new products in the field of photonics communications. In particular, POL R&D activity will be dedicated to optical fibers, advanced solutions for Fiber To The Home (FTTH) and advanced photonics technologies (in particular nanotechnologies). The total staff of POL is 80 today and will be 155 by the end of The new POL technological structure (13000 sq. mt.) will be located in the Ansaldo area and will be completed by the end of november POL will continue the traditional collaboration with the University of Southampton and with Politecnico di Milano (CORECOM). Collaborations with Universities and Research Centers will be enhanced and expanded.
14 CONCLUSIONS ENHANCING TECHNOLOGY FOCUSING ON VALUE ADDED FIBER INTRODUCING NEW PRODUCTS MISSION DEVELOPING MARKET PRESENCE AND INTERNATIONAL ALLIANCES
INDUSTRY RESTRUCTURING
CABLES AND SYSTEMS MARKET TRENDS 1998-1999 CABLES ENERGY Stable volume Europe and S. America: continuous price erosion NORTH AMERICA End of monopolies Markets opening INDUSTRY RESTRUCTURING COMMUNICATIONS
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