Published on April 30, 2008
Slide1: Francesco Armato TI Sparkle, Senior Vice President, South and Central America Region CEO, Latin American Nautilus TI SPARKLE New Players, New Services: New Wholesale Challenges AGENDA: AGENDA Company Background Telecom Italia International TI Sparkle: International Core Network Operator Network Credentials Company Key Figures Presence Worldwide New Players, New Services, New products New customer needs New scenario Evolution of the fixed and mobile retail network offers New drivers: the post convergence New challenges TI Sparkle Challenge / Our Answer BACKGROUND Slide3: Telecom Italia: a Top Company leader in ICT TOP ICT company leader in innovation Operations in Europe, South America and the Mediterranean Over 27 million fixed lines in Italy and internationally 57.8 million mobile lines, 32.4 of which in Italy 8.7 million broadband access in Europe, 6.8 of which in Italy Number of employees: 83.209 Revenues: 31.3 Billion Euros (29.9 in 2005) EBITDA: 12.9 Billion Euros (12.5 in 2005) Industrial Investments: 5.1 Billion Euros ( 5.2 in 2005) Results at December 31, 2006 Key areas of growth come from International activities Slide4: TELECOM ITALIA INTERNATIONAL FOOTPRINT Key operations in European Broadband (France, Germany and NL), Brazilian mobile and International Services (TI Sparkle) Global Services Offering * Asset held for sale BACKGROUND Slide5: TELECOM ITALIA SPARKLE Wholly owned subsidiary of Telecom Italia with the objective of developing TI Group’s international business. Full international service provider, offering a complete range of solutions spanning Voice, IP, Bandwidth and Managed Data services for fixed-line and mobile operators, ISPs and multinational corporations. TIS, through its Consulting Services Team, makes available to international operators Telecom Italia technological & commercial Know-How and ability to innovate TIS means networks, technological platforms and a worldwide commercial presence, in order to provide the best cost, top performance services to the main players of the international telecommunications market. INTERNATIONAL CORE NETWORK OPERATOR Slide6: Leading global service provider, offering Voice, IP and Data solutions for fixed-line and mobile operators, ISPs and multinational corporations (MNCs) Wholly owned subsidiary of Telecom Italia created in 2003 with the objective of developing the international wholesale and MNCs business and of supporting TI Group business units for the provisioning of international Services TI Sparkle overview Company Data 189 EBIT 14% % margin 277 EBITDA 2,044 Revenues 2005 (€M) (Minutes Bn) 13.7 Voice traffic (Gbps) 488 IP/Data traffic (# Circuits) 2.248 MNCs 214 13% 307 2,296 2006 13,7 824 2.810 Key Figures 104 15% 147 1,004 1H07 7,8 955 3.020 128 12% 214 1,801 2004 12.9 158 1.625 OUR CREDENTIALS: Wholesale Business: Top 1 in Europe (Ovum), with +300.000 Km fiber networks in 4 continents Wholesale Mobile: Leader in signaling, roaming and hubbing services: + 475 GSM Roaming Agreements, + 240 GPRS Roaming Agreements, + 50 3G Roaming Agreements + 150 CAMEL Roaming Agreements + 165 SMS Interworking Agreements, + 175 MMS Hub destinations, Signalling connectivity to +700 MNOs Wholesale Voice: Top 1 in Europe (Ovum) and Top 3 worldwide (Telegeography), +500 direct voice I/C (+80 with MNOs) Wholesale IP&Data: “Seabone” among the fastest IP backbone in the world and ranked TOP 10 worldwide, 2° in Europe, 1° in the Mediterranean (Renesys) Multinational Customers services: Top 1 in Italy (SIRMI) and emerging player in the global market OUR CREDENTIALS OUR CREDENTIALS Europe: TI Sparkle positioning in the Market: Europe: TI Sparkle positioning in the Market Alice - the leading European BB brand outside domestic market thanks to a European plug & play integrated triple-play approach Seabone is already the unique provider for the fastest growing Broadband European community Slide9: TI Sparkle Cross Border Network 55.000 km/fibre Pan European Backbone 30.000 km Latin American Nautilus 8.000 km MEDiterranean Nautilus 3.500 km Italian Network 375.000 km submarines cables Optical fibre network with DWDM technology Integrated Architecture for Voice/IP/Multimedia services. Complete decommissioning of TDM switches achieved in Nov. ‘05 Scalable POP architecture Automatic protection on fibre / equipment Surveillance and management 24h x7d basis 2 Network Operation Centres + 2 Regional NOC Palo Alto Americas Europe Asia Mediterranean LIMA Ashburn Singapore Il Cairo Athens Warsaw Prague Chicago Atlanta SMW-3, 4 Los Angeles Dallas 12 new IP/MBW/MNCs PoPs in 2007 Slide10: TIS Latin American Backbone SAC Cable System Cable length: 20,000 km in a ring topology Capacity: 1 fiber pair per ring, 32 lambda @ 10 Gbps per fibre pair MAC Cable System Cable length: 10,000 km ring topology Capacity: 16 lambda @ 10 Gbps 2007 Achievements RFS additional 20 Gbit/s capacity Implementation of additional 60 Gbit/s started in June ‘07 Implementation of core/edge architecture for the S. Paolo, Buenos Aires, Santiago del Chile PoPs Slide11: TOP 2 in Europe and TOP 4 for worldwide traffic collected on a pure international wholesale basis (home market excluded) - Telegeography Leading positioning on Signaling, Roaming and Hubbing solutions (+450 GSM Roaming Agreements, Signaling to 600 MNOs) TOP 1 in Italy (SIRMI) and emerging player on global market. Business launched in 2003. Key customers: Shell, AFP, EU Central Banks Focus on strategic regions, leveraging on wide TI Group know-how and skills “Seabone” ranked TOP1 in the Mediterranean, TOP3 in Europe, TOP 14 worldwide – Renesys (Sept 2007) TI Sparkle market positioning New Players, New Services, New Products: New Players, New Services, New Products The retailers set the pace for the wholesalers The new players and products come from the outskirts of the telecommunications market: Entertainment (music, TV and film contents) Consumer electronics Telecom Italia as a leading TLC operator is constantly looking for new areas of growth developing products to integrate in its offer the latest market demands Telecom Italia’s retail cutting-edge product development define TI Sparkle wholesale product challenges. Sparkle, as the wholly owned subsidiary of Telecom Italia with the objective of developing TI Group’s international business, has the challenge to develop a product mix to extend the services abroad New Players, New Services, New products: New Customer Needs: New Players, New Services, New products: New Customer Needs The evolution of the user profile Growth of VAS Mobile drived by Person to Person applications (SMS-MMS) Use of non TLS applications on the mobile terminal (Radio, Photo, MP3 player…) Growth of broadband penetration pushed by “all over IP” services: ”VoIP Only Players”(Skype-like) and Web content players (Google Talk, …) not only in consumer but also in corporate market (security and equiment cost barriers are already broken) The video component appears and it will transform the TLC operator in a “Content aggregator” sooner or later. Not to substitute the content providers but to facilitate the distribution of the contents through all possible channels. Gaming and on-line music growth thanks to the change from “off-line media devices” to “broadband-enabled media devices”. Phone alternative use Internet Use enrichment In this context the customer is more sensible to easyness of use, interoperability and QoS New Players, New Services, New products: New Scenario: New Players, New Services, New products: New Scenario Fixed and Mobile Netwoek operators are already looking for new opportunities to grow outside the traditional TLC services: IPTV, Entertainment, Film, Concerts, and also ITC applications for Small & Medium Corps. The barriers between the differnt TLC networks have dissapear thanks to solutions using high integration technologies. Migration of voice and data from traditional networks to a unique IP network layer. Introduction of “FixedWireless”technologies ( WiFi, WiMax, WiBro…) Evolution towards service platforms base on homogeneous standards (IMS) Consolidation of TLC terminals with consumer electronics functionalities (photo, music, TV…) Evolution of Mobile and Fixed Network Retail Offers: Evolution of Mobile and Fixed Network Retail Offers Evolution of Fixed Network Offer: Triple Play, the digital convergence of voice, data and TV Broadband & IPTV Evolution of ADSL to ADSL2+, speeds up web surfing with downlinks up to 20Mbps plus a enhanced quality for IPTV. TI launched IPTV service Alice Home TV” (two years ago - december 2005) “, now works on adding more contents every day: not only live contents (concertss, realityshows) but also TV Channels (Cinema channles and public broadcasters) Mobility also at home TI already offers the possibility to move in a broadband wired and wireless multiterminal environment Alice Home TV gives access to voice & data networks and also to contents and VAS services Evolution of Movile and Fixed Network Retail Offers : Evolution of Movile and Fixed Network Retail Offers Innovation, Segmentation and Community The offers suffers more and more segmentation by groups of customers At the same time within each segment new community services are created The commercial offers also leverage on pakaging the terminals to be used indoors and outdoors that will soon be substitued by UMA cellular terminals Broadband access and TV on Mobile Terminals WiBro (Wireless Broadcasting ) technology aims to wide range wireless access (its an alternative for. Wi-Max) Born in South Corea as a standard for Samsung. Succesfully tested for the first time by TI at Torino 2006 Winter Olympic Games. Its main difference with Wi-Max is the need of a licence but is a technological advantage to assure QoS (facilitates EMI control) Interference is the main problem for Wi-Fi and could be also for Wi-Max. In May 2006 TI launched the commercial offer of DVBH(Digital Video Broadcasting Handled) Also tested in Torino 2006 Winter Games, DVBH enables TV-watching on mobile phones It will also commercially available bundled with IPTV offers as “Alice Home TV” and “Rosso Alice” The New Drivers: The Post Convergence: The New Drivers: The Post Convergence Evolution of the fixed offerings Broadband and IPTV Telecom Italia launched Triple-Play Services on December 2005 (Alice Home TV) TV Set Top Boxes Fixed Full IP videotelephones Evolution of the mobile offerings Innovation, market segmentation and community targeted Broadband: Wi-Bro, Wi-Max, Wi-Fi (with Dual Smartphones GSM-WiFi) Mobile TV: DVBH, Wi-Fi Videophones New Fix-Mobile convergent services Mobile calls originated on selected sited with fixed tariffs Fixed-Mobile Videocalls (fixed videophones adn UMTS) Bi-Pack fixed and mobile phone bundle NEW CHALLENGES: DELIVER THESE NEW SERVICES ABROAD: NEW CHALLENGES: DELIVER THESE NEW SERVICES ABROAD FACT: we are living in a Post-Convergence market New players enter the market to offer new services from the TLC market outskirts Traditional networks and services have already converged Convergent services are already in evolution Domestic operators need to extend their offers abroad as their customers demands ubiquitous services CONSEQUENCE: International Wholesale Service Providers role’s redefinition The new challenge is to develop a wholesale product set to extend these new services abroad TI Sparkle is prepared to follow this trends with its new service portfolio Slide19: TI SPARKLE ANSWER: A GLOBAL PORTFOLIO FOR OPERATORS AND CORPORATES’ NEEDS Voice Data & IP Mobile Corporate Consulting Global termination Wholesale VOIP Prepaid cards Premium Services Global IP connectivity Managed Bandwidth on bilateral and proprietary networks SeaMeWe4 and Palermo Gateway Restoration and Protected Solutions Innovative security services Network, NGN, Technology Marketing & VAS Management & Organization Voice Signaling, GRX MMS, SMS Hubbing Mobile VAS Roaming Enhanced Services Managed Bandwidth, Frame Relay MPLS IP-VPN VOIP, Internet access and Multimedia Mobility solutions ICT vertical solutions B-end access solutions Slide20: provided by an IP based integrated multiservices network which guarantees the requested QoS level Voice Wholesale Integr. Multimedia Services for MNcs IP & Bandwidth Wholesale TI Sparkle: The Post Convergence Intl. Wholesale Carrier Mobile Wholesale *2007 Product launch *2007 Product launch *2007 Product launch Next Challenge: The Virtual Home Environment: Next Challenge: The Virtual Home Environment Increase mobility of users Every service needs a roaming feature or an extension abroad The market is already asking not only to use abroad the same services but also begins to ask for the same QoS and same price as home The International Operators will need to develop its portfolio to provide its customers a virtual home environment, wherever the customers are. TI Sparkle is ready.