May 16, 2007

PacketFront @ Community NetworksTobey Johnson, Collaborative Solutions

11-8-2007

2 May 16, 2007

Community Networks

Today’s discussion

PacketFront introduction

Community networks Community networks and the Open Access rationale Case study on successful approaches

3 May 16, 2007

Community Networks

Today’s discussion

PacketFront introduction

Community networks Community networks and the Open Access rationale Case study on successful approaches

4 May 16, 2007

Community Networks

About PacketFront

Leader in Open Access FTTH technology and business solutions

Founded in 2001 to address the challenges facedby early pioneers of FTTH

210+ employees

HQ in Stockholm, offices in Denver, Utah, Amsterdam, Dubai, Oslo, Copenhagen,

Vienna.

Focus on collaboration with business partners to create a comprehensive broadband strategy, to ensure our client’s networks are successful Financial solutions Service Provider strategies Design/Build firms Independent consultants

5 May 16, 2007

Community Networks

Global success

72 customers / FTTH operators 25 countries Offering FTTH in 154 communities

SwedenNorway

USA

Netherlands

Japan

Austria

Dubai

Denmark

Canada

Finland

Mexico

Ireland

Croatia

Latvia

Spain

Poland

Hungary

NamibiaMali

Peru

Chile Argentina

Panama

Malaysia

China

6 May 16, 2007

Community Networks

Today’s discussion

PacketFront introduction

Community networks Community networks and the Open Access rationale Case study on successful approaches

7 May 16, 2007

Community Networks

Cities worldwide are increasingly getting involved in community network initiatives

FTTx infrastructure is considered an important driver of Local Economic Development (LED)

attract people and industry (improve tax base) encourage local entrepreneurship enable better and more efficient public services improve quality of life for local citizens

Many communities are impatient with incumbent providers

slow to deploy FTTx (if any deployment at all) limited coverage (tend to cherry pick) expensive and money flows out of the community (no LED)

Cities are getting involved in community networks a number of ways

aggregate local demand (often surprisingly large) directly or indirectly driving FTTx initiatives (PPP models)

8 May 16, 2007

Community Networks

A key challenge for city driven FTTx initiatives has been to find a business model that works

The traditional ‘monopoly’ model (infrastructure and services under one roof) falls short on several accounts.

FTTx infrastructure is a local and long-term business that fits well with city competencies (e.g. another utility)

services, on the other hand, requires a strong sales and marketing acumen that is not necessarily inline with municipal expertise (e.g. brand building, content rights, bundling packages, etc.)

‘monopoly’ model creates barriers to local entrepreneurship and does little to improve public services.

increasingly, incumbents challenge cities’ rights through our legal system to use public funds to establish new ‘monopolies’.

Investing in dark fiber appears largely unsuccessful in driving LED.

fundamentally the model remains the same (network operator becomes new monopolist); limited effect on LED.

no focus on local service innovation or community involvement.

9 May 16, 2007

Community Networks

Open Access is the model of choice for a rapidly growing number of city driven FTTx initiatives

Open Access refers to a network with one network owner, and more than one service provider.

subscribers are free to select any service from any service provider in real-time

service providers deliver services in parallel over the same pipe

network owner and service providers co-operate on the basis of technical and commercial contracts

service providers maintain ownership of the customer relationship (billing and support)

network owner receives a share from all service generated revenues.

SP1

SP2

SP3

Serviceproviders

SP4

backbone

access

Networkowner

commercialcontracts

portal

technicalcontracts

$ $ $

Subscriber

Service Delivery

10 May 16, 2007

Community Networks

Cities can focus on local infrastructure while ensuring the investment meets the city‘s LED goals

The city’s role is limited to deploying and operating the network and to managing the ‘market-place’ where subscribers and 3rd party service providers meet.

relying on 3rd party service providers means the city will have access to services faster, at a limited up front cost and risk in terms of service development.

It is in the city’s best interest to bring as many service providers onto the network as possible.

possible service providers include local businesses and government institutions as well as incumbent providers.

encourages local entrepreneurship and offers an ideal platform for developing and bringing better and more efficient public services to market.

From a subscriber perspective open-access is unlike any other broadband experience.

get all broadband services via one connection while maintaining freedom of choice.

improve quality of life for local citizens.

11 May 16, 2007

Community Networks

A true open-access network is also attractive for service providers

In an open-access network multiple service providers ‘share the cost of the pipe’.

can result in a significant cost advantage and risk mitigation

focus on their core competency of providing high quality of service and customer care

CAPABILITIES REQUIRED TO COMPETE ON

DIFFERENTIATION

CA

PA

BIL

ITIE

S R

EQ

UIR

ED

T

O C

OM

PE

TE

ON

CO

ST

HighLow

High

Service provider benefits from open-access

12 May 16, 2007

Community Networks

Today’s discussion

PacketFront introduction

Community networks Community networks and the open-access rationale Case study on successful approaches

13 May 16, 2007

Community Networks

MälarEnergi, Sweden

Open Access network deployed by MälarEnergi in

Västerås, Sweden. In deployment,

now around 50,000 residential customers and

5,000 business customers.

Multi-provider business model: 29 external service

providers offering 103 services in the network.

Cost efficient operations with only

16 full time employees (4 within network

management)

Services offered via FTTH, ADSL2+ and wireless.

EBITA positive and cash flow positive – has been successful since move

to Open Access.

Based on PacketFront’s open-access solutions.

2 competing IPTV providers (ViaSat and CanalDigital), multiple

providers of other services (including

Telia, Tele2).

Winner of The Corner Stone Award 2005 and recognized as

the "Most Advanced FTTP Network" by

Broadband Properties Magazine

15 May 16, 2007

Community Networks

City driven FTTx initiatives need a business model that allows a focus on local infrastructure and innovation…

…while still ensuring the FTTx investment meets the city‘s goals in terms of Local Economic Development

and access to broadband services.

The proven solution is Open Access…

May 16, 2007

Thank you!

For more information go to:

www.packetfront.com

Tobey Johnson

Tobey.Johnson@PacketFront.com