NGN development at Magyar Telekom The future of our fix network

1
NGN development at Magyar TelekomThe future of
our fix network

• Peter Janeck
• Head of Magyar Telekom Network Division

2
NGN development at Magyar Telekom.Agenda.

• The future of our fix network
• Introduction
• Broadband customer evolution
• NGN development phases
• MT NGN roadmap
• Service roadmap
• Broadband access strategy
• Infrastructure development
• Network consolidation effects
• T-Mobile Hungary integration project

3
Market characteristics Overview Hungary key
economic and telco indicators

• Magyar Telekom area
• GDP/capita (EUR) 6 631
• Population (thousand) 7 797
• of fixed lines (100 habitants) 36,1

Reported revenues grew by 3.2 to HUF 620.7
bn (EUR 2,502.4 m) in 2005 Reported EBITDA
increased by 12.1 to HUF 249.9 bn EBITDA
margin of 40.3. Group operating profit grew
58.5 to HUF 135.2 bn, Net income increased
significantly from HUF 34.6 bn (EUR 137.6 m)
to HUF 80.1 bn (EUR 323.0 m). PSTN lines Q4/05
2.753.000 ADSL lines Q4/05 329.314 Market
share dial up 42

• Emitel area
• 100 owned by Matáv Rt.

4
NGN development at Magyar Telekom.Competition
Core sources of competition
Extended sources of competition
Alternative integrated / cost synergy providers
CATV
CATV
Data
Data
Alternative own network providers
Internet
Internet
Pure-play mobiles
Mobile
Mobile
PSTN resellers
Fixed
Fixed
Pure-play VOIP providers
5
NGN development at Magyar Telekom.Main trends
impacting MT business.
High-speed access
IP network development
Extend geographic coverage
Broadband
Growing internet penetration and bandwidth
demand Common strategy between T-Kabel
and T-Com for offering enhanced services
(Voip, IPTV, 3play)
Wireless broadband access solutions with portable
intelligent devices based on IP/NGN
NGN Development
Mobility
Services
Mobile dominates voice market Merging T-Mobile
and T-Com Hungary
Multimedia services for information,
communication entertainment, etc
Moving forward fixed-mobile convergence and
quadruple play
6
NGN development at Magyar Telekom.Broadband
customer evolution.
150000

• Targeted broadband customers at the end of 2008
  1.000.000
• VoIP, IPTV and broadband gaming customers are
  also broadband access subscribers
• MT VAS retail subscribers will take off and
  represent a significant portion of total customer
  base in year 2008 dual and triple players will
  be 15 and 22 of total access

7
NGN development at Magyar Telekom.Evolution of
NGN.

• Scope
• Exploiting potential synergies of integrated
  development, operation and maintenance of MTs
  telecommunication networks
• Common selection and implementation of a carrier
  grade NGN platform for MT Group
• Innovation platform for TMH
• Integration of pre NGN platform
• Common implementation of (new) services for
  existing market demands
• Roles of overlay NGN platform
• Migration of VoIP services on pre-NGN shall be
  judged case-by-case starting in 2009
• Data and video services accomplishing 3play
  service offers from one platform
• Carrier hosted business communication, integrated
  voice-data services to business market
• It will be the basis of platform consolidation
  substituting legacy voice and data platform
• VoIP terminating

Evolution of NGN
Pre NGN softswitch instead of exchanges
Voice over CableTV
Voice over Internet
Unified Governmental Backbone
Romanian Presence
IMS Merging Internet and mobile
PSTN simulation
Push To Talk
IP Centrex
Instant messaging
VoIP
Video sharing
NGN Global infrastructure
Integration of pre NGN
Overlay for new services
PSTN/ISDN emulation
8
IP development at Magyar Telekom.Service and
bandwidth development.

• TV based entertainment services are the next step
  towards serving the communication and
  entertainment needs of a family
• Short term proposal start implementing IPTV with
  current access technology (4-7 Mbps) to get ready
  for the future and to compete with 3play offers
  on cable
• Long term proposal start segmented access
  network developments to enhance service delivery
  capabilities for the next generation connected
  home (HD IPTV, video telephony, multiple PCs,
  high bandwidth internet, interactive gaming)

9
NGN development at Magyar Telekom.Broadband
access.

• Broadband access expansion is one of the most
  important strategic assets
• The main short term goal is to offer a wide
  spectrum of fixed and wireless connection
  possibilities, witch allows MT to provide
  broadband-end interfaces for different local
  situations.
• The mass market broadband demand will be served
  on the basis of ADSL and ADSL2
• Our Goal ist to increase the ADSL connection from
  15 up to 45 from PSTN connections
• WIMAX will be used as a HOTZONE infrastructure
  for high speed data communication, to coverage
  DSL gaps, replacing Fix-GSM and for LTO expansion

ADSL Coverage plan

• The long term strategy is moving forward to an
  optical infrastructure and replacing step by step
  the traditional copper network elements to enable
  broadband access up to 25 mbps
• In 2006 MT is testing the strength of a passive
  optical network (PON) and VDSL2 with pilot
  implementations for green field areas.

10
NGN development at Magyar Telekom.Consolidation
impacted by VoIP deployment on NGN platform.
Voice Total - Target is to stop decline of fixed
voice decreasing PSTN/ISDN lines as the result of
external effects competitors, mobile and
VoInternet substitution ADSL broadband access NGN
VoIP deployment on broadband access

• As the result of our VoIP offers based on the
  overlay NGN platform the unused capacity of
  PSTN/ISDN platform is increased. Technical
  migration shall be started substituting exchanges
  of low utilisation.
• For the objective of stopping decline of total
  voice lines a significant part of VoIP shall be
  offered in new area and as second line.

11
NGN development at Magyar Telekom.TMH
integration
Transport.

• T-Com transport network provides transport
  service for all demands of MT group
• The core transport technology of NGN is IP and
  will be developed into a high-availability
  multi-service transport
• T-Com will also provide T-Mobiles backbone for
  UMTS

Consolidation of network elements

• Positive effects for operation and maintenances
  from replacing network elements
• Nationwide IP-based infrastructure allows the
  removing of the ATM network layer
• Copper based PCM connection with multiplexer
  function between VST will be replaced by optical
  connection because of the limited bandwidth

12
NGN development at Magyar Telekom.TMH
integration project.

• Technical advantages
• common products
• flexible product development (faster to the
  market and simplified for the network operation)
• E.g. TV, video sharing, multiplayer gaming
• interworking
• Secured technical interworking between TMO and
  T-Com
• Enables interworking of IP services across
  networks (e.g. roaming) or across services
  (service interworking)

• Integrated network project
• Focus on synergies of integrated development,
  operation and maintenance of MTs
  telecommunication networks
• Analyze the development opportunities of the
  current network infrastructure towards NGN / IP
  network
• Diagnose and implement operational synergies
• Elaborate cost efficient integrated network
  concept based on market requirements as defined
  by residential and corporate segments
• Define implementation timeline and estimated
  CAPEX need