North American Status Report

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North American Status Report
www.ftthcouncil.org
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North America Ramping Up

• USA - FTTP Verizon, FTTN ATT
• Canada - FTTN and DSL, FTTH SaskTel
• Mexico - Community Trials Underway, Monterrey

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Cable Operators Fierce Triple-Play Competition

• Cable MSOs - 85 Billion Network Investment from
  1994 to 2004
• Voice Service Deployments Accelerating
• HDTV ubiquitous in 2006
• DVR, PVR part of service offerings
• Interactive offerings increasing
• Pursuing Business Customers
• Footprint expanding to offer leased line and IP
  Services
• Comcast, Time-Warner, Cox, Cablevision, Rogers,
  Shaw

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Status of Connection Access
Source RVA Render Associates, LLC 2006
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FTTH Homes Passed (Cumulative North America)
Source RVA Render Associates, LLC 2006
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FTTH Homes Connected (Cumulative North America)
Source RVA Render Associates, LLC 2006
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Telco Industry Overview andG-PON deployments
There are five classifications of North American
Telcos

• RBOCs Verizon, ATT, Bell South
• 2nd Tier IOCs Embarq, Windstream
• 3rd Tier IOCs Hope City Tel, Windom
• IOCs as CLECs GVTC, Windstream
• Overbuilder CLECs Grande, Knology

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FTTH Industry Overview - RBOCs

• Verizon passing 3 million homes per year
  Tellabs (BPON/GPON), Motorola (BPON/GPON) and
  Alcatel (GPON)
• ATT passing 0.5 million homes per year Alcatel
  (FTTN, GPON)
• Qwest has no public FTTH plans
• BellSouth adding 200k new homes per year on FTTC
  Tellabs (FTTC)
• Bell Canada Lucent (FTTN)

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ATT FTTN In North Texas
FTTN in Frisco TX
FTTH Pearsons Farms
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Overall Take-Rate for FTTH (Cumulative North
America by Year)
Source RVA Render Associates, LLC 2006
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Overall Take-Rate for FTTH Non-RBOC (Cumulative
North America by Year)
Source RVA Render Associates, LLC 2006
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Independent Operating Companies

• Three Groupings
• 2nd Tier Multi-State holding Companies
• Embarq, Frontier, Century, TDS
• 3rd Tier Single State, Single Franchise IOCs
• Paul Bunyan Tel Coop, Farmers Tel,
• Overbuilders and Municipalities
• Knology, Bristol VA Utilities, ShenTel, GVTC,
  Comporium, Grande Comm., SureWest, Lafayette
  Utilities.

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2nd Tier IOC Market
Largest Multi-State IOCs
Largest Multi-State IOCs

• 5th largest LEC
• 7.1 million access lines in 18 states

• 6th largest LEC
• 3.4 million access lines in 16 states

• 7th largest LEC
• 2.5 million access lines in 24 states

• 8th largest LEC
• 2.4 million access lines in 22 states

Approximately 20 operators Smallest is Greenpoint
200k lines
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2nd Tier IOC Market
Embarq was formed in 2006 through the spin-off
of Sprints landline business and Sprint North
Supply. HQ in Overland Park Kansas
7.1 million access lines in 18 states Indiana,
Florida, Delaware, Kentucky, Kansas, Missouri,
Nebraska, New York, Nevada, North Carolina, Ohio,
Oregon, Pennsylvania, South Carolina, Wisconsin
and Texas.
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2nd Tier IOC Market
Windstream was formed in 2006 through the
spin-off of Alltel's landline business and merger
with VALOR Telecom. HQ in Little Rock, Arkansas
3.4 million access lines in 16 states Alabama,
Arkansas, Florida, Georgia, Kentucky,
Mississippi, Missouri, Nebraska, New Mexico, New
York, North Carolina, Ohio, Oklahoma,
Pennsylvania, South Carolina and Texas.
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Telco Industry Overview Mid Tier

• 2nd Tier Independent Operating Companies
• Embarq planning G-PON in 2007
• TDS limited trials in 2006
• Tennessee, Georgia, Oregon and Washington
• Citizens - limited trials in 2006
• Windstream - limited trials in 2006

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3rd Tier IOC Market
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Stratford Iowa FTTH
103 year-old Telco -700 subscribers FTTH in 2005
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3rd Tier IOC Market Statistics

• 3rd Tier IOCs
• 1,300 1,400 small operators
• 8 million subscriber lines long loops
• Average access lines 6,250 35 Emps
• Max 35,000 lines Min 700 lines
• Total Capital Expended by Tier 3 in 2005 - 3
  Billion (average 2.3 Million per operator)
• DLC/FTTX/DSLAM 42 of CapEx (1.26 Billion)
• Segment CapEx growth 15 per Yr

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Market Forecast - KMI
16 million subscribers in 2011
AE Munis, Utopia, Overbuilders PON
RBOCs, IOCs, Utilities 2007 transition year
BPON to GPON Almost zero GEPON
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Fiber-to-the-Home Councils
North America www.ftthcouncil.org Europe
www.europeftthcouncil.com Asia-Pacific
www.ftthcouncilap.com