Open Services Exchange Model. fiber to all. Tomasz Kozar

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1 Open Services Exchange Model fiber to all Tomasz Kozar

2 Challenges for traditional Telecom Operators Big Data great for Society, a Threat for Incumbents New revenues opportunity is a key driver to deploy new service model 2010 ViaEuropa AB. All rights reserved. 2

3 5% Broadband Penetration Fixed broadband subscription >256 kbit/s 90% 80% Developed Markets Developing Markets Emerging Markets (<5% BB Penetration) 70% 60% 50% 40% 30% 20% 10% 0% Source: OECD, Dec 2010 Poland 17,2% (0,2% FO, 2% Y2Y Grow) 2010 ViaEuropa AB. All rights reserved. 3 Penetration (% of Households) Korea Iceland Israel Denmark Netherlands Switzerland Canada Finland Norway Sweden Japan Belgium Luxemb. US UK France Australia Estonia Spain Austria Italy Portugal Germany New Zealand Ireland Chile Hungary Czech Rep. Poland Turkey UAE Argentina Mexico Brazil Slovakia Romania Qatar Venezuela Greece Bulgaria Peru Lebanon Morocco Colombia Russia Jordan Tunisia South Africa Egypt Bolivia Algeria Ukraine Saudi Arabia Pakistan

4 Public investments in telecommunications OECD Council on Broadband Development Give open ICT infrastructure Contribute to grow and jobs Competition Reduce the civil works 2009 Cisco Systems, Inc. All rights reserved.

5 The Open Services Exchange Model Complete Ecosystem for the Service Innovation Economy PTT/ Cable TV VSP - Open Services Market Open Services Exchange Active Network ebay-type open economy in which customers can offer and purchase services on equal terms Open Services Exchange (OSE): Service innovation and governance ecosystem operated by an OSE Operator (OSEO) Open Services Exchange Network (OSEN): NGN symmetrical IP infrastructure providing connectivity and quality service delivery Passive Infrastructure Passive Infrastructure Provider (PIP) taking advantage of right of way and utility economics C Cisco Systems, Inc. All rights reserved. Cisco Confidential 5

6 Passive infrastructure Lease of fiber optic connection (dark fiber) Network open to all players on equal terms No technology limitation, high symmetrical bandwidth Long term investment - one time digging 4x 480 ~2k fibers 2009 Cisco Systems, Inc. All rights reserved.

7 Open Services Exchange System Customer Portal 2009 Cisco Systems, Inc. All rights reserved.

8 User portal Maximum choice for cutomer 370 :- 279 : Cisco Systems, Inc. All rights reserved.

9 Open Services Exchange Model Service Innovation Promoting Internet-based innovation, competition and consumer choice 2009 Cisco Systems, Inc. All rights reserved.

10 Follow the dollar example 10/10 Mbps Ethernet access 23 VSP - Open Services Market Open Services Exchange Operator Active Network Customer pay incl. VAT to VSP VSP pay 15 excl. VAT to VE VE pay 12 excl. VAT to Infrastructure provider Passive Infrastructure City Carrier Local ISP SP 2010 ViaEuropa AB. All rights reserved. 10 PPP

11 Use case Presentation_ID 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11

12 Scandinavian experience of building open fiber networks Example STOKAB owned by City of Stockholm Facts: - Founded in % owned by City of Stockholm - This InfraCorp to build and own all fiber infrastructure - Strictly neutral on the market - Lease fiber on equal terms and fair price employes - More that 1,200,000 km of fiber - More than 5,500 km of cable - Turnover 60 M EUR (2010) - Profit margin last year was 30% - 100% re-investmet Mission: Give Stockholm an open ICTinfrastructure Contribute to grow and jobs Reduce civil works Public service on commercial terms to create an information society for all. C Cisco Systems, Inc. All rights reserved. Cisco Confidential 12

13 Local Gov Benefits of the open access Connectivity Competition Social benefits One infrastructure for all Lease dark fiber to fair price (fixed price down town/ inner city) Create conditions needed for grow : well developed digital infrastructure, open access, operator neutral fiber-optic network Promoting Internet-based innovation, competition and consumer choice New business opportunity - high competitive infrastructure for industry Lower threshold for new company entries, customer will not have high investment costs or costs of operations Service deliver time 2-6 weeks Customer can focuse on core business Reduce civil work Smart City Intelligent community Active purchaser of new public e-services to make live easier for citizens and make public service more efficient Build infrastructure once, no need for digging the ground New services coverege from day 1 IP TV, Video conferencing, Security, e- Services Strategic partnership behind invesments (EU founds ) 2009 Cisco Systems, Inc. All rights reserved.

14 OSE activities for PS in Poland Presentation to Mayor advisor of City of Poznan January 2011 Presentation to Mayor advisor of City of Wroclaw February 2011 Presentation to Polish Regulator (UKE) March 2011 Presentation on Broadband Forum in Warsaw April Presentation on MoI Conference in Lublin - June Cisco Systems, Inc. All rights reserved.

15 OSE activities and benefits for SP Broadband penetration assumptions Rural achieve 80% coverage in year 14 Metro Low Density achieve 80% coverage in year 7 Metro High Density - achieve 80% coverage in year % Rural 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% Metro - low density NPV $6,000,000 $6,000,000 NPV $5,000,000 $5,000,000 $4,000,000 $4,000,000 $3,000,000 $3,000,000 $2,000,000 $2,000,000 $1,000,000 $1,000,000 $ $ $(1,000,000) $(1,000,000) Net Present Value (NPV) Net Present Value (NPV) Investment Profits $(2,000,000) $(2,000,000) $(3,000,000) $(3,000,000) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year % 2009 Cisco Systems, Inc. All rights reserved.

16 Transformation Begins with a Vision Enable a national infrastructure empowers citizens, government, and businesses Connecting the catalysts of a nation s growth on a common intelligent information network * Information and communications technologies C Cisco Systems, Inc. All rights reserved. Cisco Confidential Source: Cisco IBSG, 2008

17 C Cisco Systems, Inc. All rights reserved. Cisco Confidential 17

18 Open Services Exchange Operation in ICT Infrastructure Implementation of OSEO Show Case OSEO CityCarrier Regional partners Real estate partners PPP Investment Roll out FTTx C Cisco Systems, Inc. All rights reserved. Cisco Confidential 18

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