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User-Centric Broadband: Alcatel’ s vision for growth

User-Centric Broadband: Alcatel’ s vision for growth. IDATE - November 25, 2004 Philippe Germond, Alcatel. Internet wave II: The Broadband World. High Traffic Growth High $ Value. 3 questions for Service Providers:. Internet wave I. Will the addressable $ pie grow?. High Traffic Growth

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User-Centric Broadband: Alcatel’ s vision for growth

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  1. User-Centric Broadband: Alcatel’s vision for growth IDATE -November 25, 2004Philippe Germond, Alcatel

  2. Internet wave II: The Broadband World High Traffic Growth High$ Value 3 questions for Service Providers: Internet wave I • Will the addressable $ pie grow? High Traffic Growth Low $ Value • How will they grab a larger share of the pie? • Alcatel’s “User-Centric Broadband” vision for success From the Internet Bubble to the Broadband World

  3. Internet Wave II: The Broadband World Question #1 for Service Providers: Will the Addressable Pie Grow?

  4. Emerging markets: growth from increased mobile penetration • Developed markets • Fixed telephony decreasing (fixed-mobile substitution, pricing models) • Still increasedmobile usage • Increased broadband penetration (fixed & mobile) Source: IDATE, DigiWorld 2004 • VoIP threat Opportunity for Voice & Data Communications: Maturing Market

  5. Users (m) Monthly fees (€) X 3 Price drop 5 50 4.6 m € 4 40 X 2 Bandwidth € 3 30 512 Kb 1 Mb X 6 2 m Users 2 20 € X 1k 1 0.7 m 10 Unbundled lines <1 k 60 k 700 k 0 0 Mid 2002 Mid 2003 Mid 2004 Broadband demand has proven elastic to price decreases and bandwith growth Total lines Unbundled lines … in two years Example: French fixed broadband market

  6. From free dial-up access to €30/month triple play broadband service Future model is combination free + premium services Premium value: immediacy, personalization, richness, legal, mobile access... • 150M paid downloads (oct 04): value is ease-of-use with iPod and “clear conscience” • Free + Premium Services (mobile access & extra content) for specific segments (ex: avid investors) From “Free” to “Free + Premium”:customer segments pay for specific value & simplicity

  7. Translating UnmetNeeds into Services Virtual Assistant Virtual Watchman Empower Me Video on demand Video on the go Entertain Me Message Management Automatic Synchronization Network Back-Up Organize Me Video-Telephony Real-time Quality and Cost-Based Routing Connect Me Hierarchy of Broadband Needs Examples of Services A lot of unmet needs beyond access Key Success Factors will be CUSTOMER VALUE and EASE OF USE Source: Alcatel focus group research, April 2004

  8. Where is the market disruption (big opportunity to grow)? Voice and Data Communication (€1000Bn)* Will the Addressable Pie Grow? The Opportunities in: • Consumer • Small & Medium Business COMMUNICATIONS *Source: ALCATEL based on various analyst sources

  9. REMOTE MONITORING “Track what is important to me” Empower Me Voice and Data Communication (€1000Bn) Entertain Me CONTENT EXCHANGE “See what I see” Organize Me EMOTION SHARING “Feel what I feel” Connect Me Hierarchyof Broadband Needs Will Video Communications come of age? The Opportunity for Communications Source: Alcatel Video Research, Dallas, Philadelphia, London, Milan; Alcatel August 2004

  10. Interactive Video Mobile Entertainment Empower Me BROADBANDENTERTAINMENT Broadcastand Content(€300Bn) Entertain Me Organize Me Connect Me The Opportunity for Communications Hierarchyof Broadband Needs Will Interactive Video come of age? Will Mobile Entertainment come of age?

  11. Unmet User Needs in Video Entertainment: Opportunity for Broadband MORE INTERACTIVE Entertainment and Communications habits converge“View together” Mobile phone becomes remote control User-CentricBroadbandVideo MORE PERSONALIZED “Primetime” becomes “My Time” From “Broadcast” to “User-Centric distribution” (ex: VoD) MORE ACCESSIBLE Entertainment goes mobile Source: Alcatel Video Research, Dallas, Philadelphia, London, Milan; Alcatel August 2004

  12. Broadband securityagainst piracy User-Centric Digital Rights Management Early release for Video on Demand Service Providers and Content Providers: Alcatel Facilitates Conditions for Joint Growth Conditions for joint growth:

  13. + COMMUNICATIONS ENTERTAINMENT Interactive Video Mobile Entertainment Video Communications Voice and Data Communication (€1000Bn) Broadcastand Content(€300Bn) Will the Addressable Pie Grow?The new Consumer Market for Service Providers

  14. SMB demand simplicity • ICT integration • One-stop shopping & support • Telcos can leverage • Brand • Local footprint • Need to sort out • Offering (ICT bundle) • Channel strategy SMB Mid Market Solutions for multi site SMBs SMB Mass Market Packs for mainly single site SMBs 100ks 1Ms Will the Addressable Pie Grow?The Small and Medium Business (SMB) Opportunity Sources: Alcatel, Eurostat, BNP Paribas, IDC, AMI Partners, Frost&Sullivan

  15. Internet Wave II: The Broadband World Question #2 for Service Providers: How to Grab a Larger Share of the Pie?

  16. Interactive Video Mobile Entertainment Video Communications Voice and Data Communication (€1000Bn) Broadcastand Content(€300Bn) New Competition for the Consumer Opportunity + COMMUNICATIONS ENTERTAINMENT CABLE OPERATORS CONTENT PROVIDERS SATELLITE BROADCASTERS MS.NET MODEL

  17. 1995 2000 2005 2010 Alcatel sees 3 stages of evolution New Services Adoption User-Centric Broadband Services Broadband Services Multiple new Connectivity Services

  18. Users want a DIVERSITY of devices and connectivity + Users want a DIVERSITY of services Mobility Empower Me EntertainMe OptimalTrade-Off Comfort Cost Organize Me Connect Me Hierarchy of Broadband Needs Security What consumers tell us: they want MORE DIVERSITY Source: Alcatel focus group research, April 2004

  19. NETWORK ORCHESTRATES for SIMPLE EXPERIENCE • Any device, Any broadband • Single Authentication • Consistent Personalization • Transparent Synchronization • Users demand SIMPLICITY • Diversity of services, devices and connectivity creates COMPLEXITY Network will manage COMPLEXITY for the User

  20. Service Providers’key assets CommunicationNetworks Customer relationship(invoice, support interactions,behavioral data) Brand Service Providers are in key position to increase CUSTOMER APPEAL & LOYALTY Service Providers’key opportunities Rewarding experience (Quality of Service, Choice of Connectivity, one-Stop Shopping) Single customer profile (single bill, single reference for parameters & data) Trusted Guardian (security and privacy)

  21. FIXED SERVICE MOBILE SERVICE 2.5G BASIC MOBILE VIDEO Phase 1:Market entry TRIPLE PLAYSERVICE BUNDLE PERSONALIZED ANDINTERACTIVE EXPERIENCE VIDEO-TELEPHONYINTEROPERABILITY PERSONALIZED ANDINTERACTIVE EXPERIENCE VIDEO-TELEPHONYINTEROPERABILITY Phase 2: Secureanddevelop Phase 3: Differentiatelong-term USER-CENTRIC BROADBAND SERVICES Broadband Video Strategy for Service Providers: Communications enable new User Entertainment Experience

  22. Internet Wave II: The Broadband World Alcatel’s“User-CentricBroadband”vision for ServiceProvider success

  23. Enabling User-Centric Broadband Business Environment The bestaccessnetworkavailablefor whatthe userneeds to dohere & now A transportthat providesthe requiredQualityof Service A servicedeliveryplatformmanaginga singlecustomerprofile Any Content Every Terminal, Everywhere Each User Consumer Environment

  24. User-Centric Broadband Architecture Business Environment UniversalBroadband Access Wireline WirelessSatellite Mobile Service Aware Edge & Data Aware Transport Service Delivery Platform Any Content Every Terminal, Everywhere Each User Consumer Environment Operations & Business Support Systems Integration & Operations

  25. Wireline access • WW #1 • Mobile access • Within top 4 GSM, • fastest growing • Evolium JV vith Fujitsu: • largest 3G installed base Mastery of Key TechnologiesAlcatel End-to-End Integrator • Service Aware Edge & DataAware Optics • Optics: WW #1 • Wireless transmission: WW #1 • NB switching: WW #1 • ATM/FR: #2 • IP multiservice routers: leader • Business environment • IP-PBX: Europe #1 • Contact centers: WW #1 • Voice infra: within top 4 • Service Delivery Platform • Extensive suite • Leading positions in rating, Mobile Prepaid, Video applications • Services • Professional services: within top 3 • Network outsourcing: WW #1 • Wireless access • Telecom satellite: WW #1 • LMDS: WW #1

  26. France Telecom Alcatel is FT’s partner for IMS-enabled services

  27. Customer Experience Speed to Market 21CN Cost Transformation Alcatel and BT Alcatel is BT’s partner for: 21CN Project BluePhone BT Communicator

  28. Alcatel and SBC Alcatel is SBC’s partner for Project Lightspeed Oct. 21st, 2004

  29. Alcatel Broaden Your Life

  30. www.alcatel.com

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