julija jurkevic

This document is confidential and is intended solely for the use and informationof the SNL Financial and the individual, group,or corporation to whom it is addressed.

FTTH and Video CompetitionFTTH Council Europe Conference

Presenter: Julija Jurkevic

Prepared: February 20, 2013

All web-sourced video

All connected devices

PC, tablet, Smart TV, game console, OTT STB

Free broadcast catch-up

Premium rental & purchase

User generated content

Rogue sources

Deployed by pay-TV operators — cable, IPTV, DTH

Authenticated & free to all

Multi-screen: PCTV, game consoles, smart TVs

Diverse content supply: Network supplied VOD, UGC, adjunct, LIVE

Ad-based and rental models. Download to own (DTO) natural extension.

Over-the-top (OTT) Video & TV Everywhere

OTT TV Everywhere

2© 2013 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

Broadband speeds higher than 4Mbps

Strong telecom presence

Open regulatory environment

Diverse international content

Strong local broadcasters

Excess broadband capacity — 20Mbps-100Mbps pipes

Residential purchasing power — device affordability

3

OTT Viability Indicators

© 2013 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

4

OTT Viability — MIND THE GAP

0

25

50

75

100

125

Broadband HHs/HHs Multichannel Subs/TVHH Share of Cable Broadband HHs(%)

Near-term OTT opportunities BRIC: Futureopportunities


© 2013 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 5

Affordability Gap Between Basic Cable, DTH & OTT

48.46 49.57 45.54

22.20

35.57

57.98

36.26

18.06

15.68 13.85 18.54

8.85

8.32

8.00

7.86

7.89

64.14 63.42 64.09

31.05

43.89

65.98

44.11

25.95

0

10

20

30

40

50

60

70

Monthly OTT Subscription Price

Monthly Broadband ARPU

(US$)

Basic cable 1.1% 1.4% 1.5% 0.4% 3.5% 1.1% 0.3% 1.0%DTH 1.3% 2.2% 1.3% 0.6% 5.1% 2.1% 1.4% 2.0%OTT 1.9% 2.6% 2.2% 1.2% 4.6% 2.0% 1.4% 0.8%

Australia(Quickflix)

New Zealand(Quickflix)

Japan(Hulu)

South Korea(SK Broadband)

Brazil(Netflix)

Canada(Netflix)

France(VideoFutur)

U.K.(LoveFilm)OTT system:

Telefónica - Spain

7,734 8,392 8,670 8,898

1,863 1,954 2,083 2,2341656 171 316

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2009 2010 2011 2012

DSL Cable FTTH

(000)

Spain Major Fixed Broadband Platforms Spain Broadband Net Adds by Platform

DSL 80.0% 80.2% 78.7% 77.2%

FTTH 0.2% 0.5% 1.6% 2.7%

568

657

278228

85 91129 151

6 40116 145

0

200

400

600

800

2009 2010 2011 2012

DSL Cable FTTH

(000)

Telefónica’s Home and largest market Incumbent Nationwide Fixed Line Operator Networks: xDSL, FTTH, Wireless 4 Play services – Fixed phone, IPTV, Internet, Mobile voice/data TV Everywhere

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BB Mkt. Share 56.7% 54.7% 50.9%

% of Total Subs 0.2% 0.9% 2.9% 4.7%

% of FTTH Mkt. 71.3% 87.8% 95.0% 96.6%


Telefónica Spain

5,2925,331

5,4245,477

5,5795,620

5,6725,722 5,749

5,6695,607 5,609 5,600 5,613

5,580

4 7 9 11 19 25 3249

6693

126

163

200232

261

0

100

200

300

400

5,000

5,200

5,400

5,600

5,800

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Total BroadbandFTTH

(000)Telefónica Total Broadband and Fibre Subs

2009 2010 2011 2012

Telefónica offers ADSL, VDSL, and FTTH service bundles

Complete HD TV offer available only with FTTH - Linear & On-Demand content

FTTH offers a substantial boost in upload speeds

VDSL upload speeds similar to ADSL

Price/MB is cheaper for FTTH services than xDSLxDSL – at least €1/MB; FTTH - €0.4/MB

FTTH ARPU is 38% higher than xDSL ARPU

FTTH services are priced competitively100Mbps 2 play: €12 cheaper than Cable 100 Mbps 2-play (ONO)

100Mbps 3 play: €6 cheaper than Cable 3-play (ONO)


Telefónica Spain — FTTH Services

FTTH ARPU - €80.85

xDSL ARPU - €58.43CMT, Q3 2012

€ 0.0

€ 0.5

€ 1.0

€ 1.5

€ 2.0

€ 2.5

ADSL VDSL FTTH

Price/MB of Data

Orange – France

18,586 19,858 20,982 21,916

1,160 1,217 1,415 1,58369

118 198 303

0

5,000

10,000

15,000

20,000

25,000

2009 2010 2011 2012

DSL Cable FTTH

(000)

France - Major Fixed Broadband Platforms

France - Broadband Net Adds by Platform

DSL 93.7% 93.6% 92.8% 92.0%

1,277 1,2721,124

934

153 57198

16821

49 80 1050

200

400

600

800

1,000

1,200

1,400

2009 2010 2011 2012

DSL Cable FTTH

(000)

FT’s Home and largest market Incumbent Nationwide Fixed Line Operator Networks: xDSL, FTTH, Wireless 4 Play services – Fixed phone, IPTV, Internet, Mobile voice/data TV Everywhere

http://www.1000flags.co.uk/ekmps/shops/1000flagsuk/images/france-flag-button-pin-badge-6167-p.png�

BB Mkt. Share 44.8% 43.0% 42.4%% of Total Subs 0.4% 0.6% 1.0% 1.5%% of FTTH Mkt. 50.7% 45.8% 48.0%


Orange France

8,5408,639

8,7638,880 8,879 8,925

9,0169,128

9,3089,371

9,4789,598

9,6719,749

9,827

24 29 31 35 37 42 4554

6573

8295

108123

144

0

50

100

150

200

8,000

8,500

9,000

9,500

10,000


Total BroadbandFTTH

(000)France Telecom-Orange —Total Broadband and Fibre Subs

2009 2010 2011 2012

Orange offers ADSL and FTTH services

HDTV, 3DTV, multi-screen available to all FTTH subs but limited or unavailable for ADSL subs

ADSL to FTTH upgrade increases speed at least x 5

FTTH bundles are17% more expensive than ADSL bundles, but frequent promotions reduce price difference

FTTH services are priced competitively to cable

200Mbps bundle: €65cheaper than comparable Cable bundle (Numericable)


Orange France: FTTH Services

12

Orange France Broadband ARPU


7.66 7.607.40

7.707.90 7.80

7.50 7.607.30

6.606.90 7.00 7.00

6.70

5.705

6

7

8


(€)

2009 2010 2011 2012

Total 34.80 35.00 35.10 36.20 36.20 36.60 36.10 37.00 35.70 35.50 36.00 36.50 36.10 36.10 36.10

27.14 27.40 27.70

28.50 28.3028.80 28.60

29.40

28.4028.90 29.10

29.5029.10 29.40

30.40

26

27

28

29

30

31


(€) Access ARPU

Services ARPU (Voice and Video)

2009 2010 2011 2012

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Thank You & Q&A

13

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julija jurkevic

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