Skyline marketing Transforming the Network: Implications for Telecom Power Marketing Intelec 2004 Chicago September 22, 2004.

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Transforming the Network:Implications for Telecom Power Marketing

Intelec 2004Chicago

September 22, 2004

skyline marketing

Wireless/Wireline Parity

0.0

50.0

100.0

150.0

200.0

1999 2000 2001 2002 2003

(mill

ions

)

ILEC Lines Wireless Subs CLEC Lines Cable Modems DSL

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POTS to PIPES

Circuit switches to packet (C2P)

Narrowband POTS to broadband PIPES (P2P)

“Triple-Play” services: POTS + Internet + TV on unified networks

Reduce costs: redirect capex and reduce opex

Total TelcoConnections

020

40

60

80100

120

140

160

180200

1995 2000 2005 2010 2015 2020

Mill

ion

s o

f C

on

ne

ctio

ns

POTS

BroadbandxDSL and T-1

Ultra-Broadband

PIPES

Resale/UNE

Total Narrowband

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Major Telco Priorities

New Growth Businesses

26%

Established Business

74%

2004e CapEx = $15.7 B

New revenue streams to replace POTS

Bundled services to boost ARPU and replace profits

Significant and sustainable OPEX reductions

Retain and win-back customers

Shift CAPEX to new technologies … C2P and P2P

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DC Power Systems

PrimaryDistribution

SystemControl

Batteries

UtilityAC in

-48 VDC out

AC/DCRectifiers

-48VDC Loads

DC/DCConverter

DC/ACInverter

AC Loads

OtherDC

Loads

SecondaryDistribution

… only the packaging changes!

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Local Exchange Carriers

CO Size • 0-500 • 500-1K • 1K-5K • 5K-10K • > 10K

RBOCs82%

Sprint LTD5%

CLECs7%

Other IOCs6%

Regional Bell Operating Cos (RBOCs)

Independent Telcos (IOCs)

Competitive Local Exchange Carriers (CLECs), including Cablecos

CO Size • 0-500 • 500-1K • 1K-5K • 5K-10K • > 10K

RBOCs82%

Sprint LTD5%

CLECs7%

Other IOCs6%

RBOCs82%

Sprint LTD5%

CLECs7%

Other IOCs6%

Regional Bell Operating Cos (RBOCs)

Independent Telcos (IOCs)

Competitive Local Exchange Carriers (CLECs), including Cablecos

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ILEC Network Before C2P

Local Exchange

Business

ResidentialNGDLC

STPSCP

SCP

STPSCP

STP

Tandem

HEO

PBX

Tandem

Long DistanceNetwork

SEO

Local Exchange

Business

ResidentialNGDLC

System

REO

PBX

Local Exchange

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ILEC Network After C2P

Local Exchange

Business

Residential

KeySystem

Softswitch

PBX

PacketNetwork

Local Exchange

Gateway

Gateway

Servers

Gateway

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Access Network Infrastructure

“Subscriber”

MDF

F1 “Feeder” Plant

F2 “Distribution” Plant

Service Drop

F2 Service Terminal

Tandem (via IOF)

T1 trunks on copper or fiber

DLC(COT)

Central Office

Service Drop

F2 Service Terminal

BuildingEntranceTerminal

“Subscriber”

MTU orMDUClass 5

Switch

CO

Loop

~ 296 M “Equipped” Loops in Major Telcos~ 168 M “Working” Loops in Major Telcos

DLC (RT)

SAIC

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Fiber-to-the-Node (FTTN)

Remote DSLAM (300-500 Subs)

5,000 ft max.Copper distribution

SAIC

Voice(PSTN/TDM)

Data(ATM/FR,

IP/Ethernet)

CO

12,000-18,000 ft.Fiber feeder cable

PowerNode

Remote DSLAM

(300-500 Subs)

SAIC

Softswitch

48/190 VDC

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Fiber-to-the-Premises (FTTP)

Circuit/PacketSwitch

Optical LineTerminal (OLT) Splitter

Central Office

ResidentialOpticalNetworkTerminal

(ONT)

ONT

ONT

Ethernet

N x POTS

Small Office/Home Office

Upstream Data Rate = 155 MbpsDownstream Data Rate = 622 MbpsSeparate Wavelength for Video = 1550 nm

DC Power

AC

AC

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In-Building/Near Building

Picocell

Neighborhood

Microcell

Vehicular

Macrocell

Integration with Wireline Network

Cell Site TrendsMobility Access

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In-building/Near-Building

Picocells2.5G/3G

Neighborhood/PedestrianMicrocells2G/2.5G/3G

Vehicular Macrocells2G/2.5G

Cell Site Deployments

Wi-Fi Hotspots

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DC Power System Trends

Serving AreaSmall Power Plant

(150-800 A)

Customer Macro/MicroPower Plant

(5-100 A)

CEVs,Huts,

Cell Sites

ONUs,Fiber Nodes,

Micro/picocells

“Power plant on a pole;power plant in a cabinet.”

CO/HubLarge Power Plant

(2,000-10,000 A)

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Global Telecom Power Market, 2008

CALA

Asia

Europe (+ MEA)

N. America

China

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2000 2001 2002 2003 2004 2005 2006 2007 2008

US

$ m

illi

on

s

5-Year CAGR = 6%

Source: Skyline est.

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Power Product/System Features• Energy efficiency

– 90-92+%; thermal performance

• Power density– Smaller size, weight for same output

• Ease of handling– Installation, maintenance

• Improved system control– Remote operation– Short-interval provisioning/maintenance

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Telco Decision Factors• Packaging

– Reduced size/weight in compact package

• Performance– Increased power density– High availability/reliability– Energy efficiency– Remote intelligence, hands-off operation

• Price– Competitive first costs– Lower life-cycle costs

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Strategic Marketing• Know your customers

– Network topology, customer base, key issues/drivers

• Adapt to price pressures– Bigger carriers looking for capex, opex reductions

• Develop value-adds– Turnkey packages - Equipment + Services in one stop

– Time = money - JIT, Inventory management

• Scope aftermarket opportunities– Equipment add-ons, site management/maintenance

– Growing outsource opportunities

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• It’s a small systems market!– Access gateways/remote terminals closer to customers

< 1 mile Small power plants will predominate

• Sell telco-by-telco– Each situation is unique

Develop a USP for each

• Follow the money!– Focus on key accounts

Need to assess opportunities/risks Develop OEM channels

Strategic Considerations

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Skyline Marketing Groupwww.skylinemarketing.com

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