Creating the Cloud: eliminating the disruption between content and access 28th April 2010, Istanbul, Turkey Sergey Shavkunov International Market Analysis

22 Agenda What is the Cloud?IWhat is the Cloud3 The Cloud in the Caspian Region II 9 Eliminating the Disruption III12 VI 20Impact on the Caspian Region

33 What is the Cloud?IWhat is the Cloud3 The Cloud in the Caspian Region II11 Eliminating the Disruption III15 VI 20Impact on the Caspian Region

4 What is the Cloud? World Digital WorldOnline World  The Cloud is not a telecom infrastructure  The Cloud is not the Internet  The Cloud is not all digital content The Cloud is the online digital world available both for people and businesses

5 Digital World Main areas of digital content:  Entertainment & Mass Media  Telecom & IT Industries Telecom & IT industries Entertainment & Mass Media

Online World Source: ITU Today Five years ago 6

How large is the Cloud ecosystem? I. Telecommunications Source: Gartner  Narrowband services generate > 92% of telecom revenue  Data communications & Internet make $150 billion or ~ 8% of total telecom revenue, while together they consume 99% of global capacity Source: TeleGeography Global Capacity Split by Network Type 7 $150 billion

How large is the Cloud ecosystem? II. IT industry Enterprise market is conservative, but progress in consumption of online services is evident:  IT Cloud Services market reached $17.4 billion in 2009  20% of needs in data center facilities are co-located or outsourced (IDC)  Software-as-a-Service market is estimated $8 billion or 3% of total software sales (Gartner) Source: Forrester, IDC Source: IDC 8 $17.4 billion

How large is the Cloud ecosystem? III. Entertainment Source: PricewaterhouseCoopers 9 Digital entertainment market revenue by components:  mobile & online audio ~ $11 billion (eMarketer)  online video ~ $6 billion (Strategy Analytics)  online games ~ $16 billion (OECD)  online advertising ~ $32 billion (IDATE) $65 billion

10 Key Cloud Components Content Storage Processing Applications TransmissionAccess Broadband Wireless CATV Dedicated Lines IP VPN EPL

What is the Cloud?IWhat is the Cloud3 The Cloud in the Caspian Region II11 Eliminating the Disruption III15 11 VI 20Impact on the Caspian Region

12 The Cloud in Caspian Region I. Access  Total number of broadband lines is rapidly growing. In 2009 it exceeds 25 million  Broadband penetration is not uniform by countries  Not only GDP per capita influences on number of broadband subscribers…

13 The Cloud in Caspian Region II. Content  DataCenterMap accounts over 1500 data centers in 68 countries, and only 21 in Caspian region  The major “content stores” in Caspian region: Russia, Turkey and Ukraine  The Caspian region will need to transmit traffic from outside for a long time Source: TeleGeography Sources: J’son&Partners, Datacentersmap, Networks&Business, ~ >~

14 The Cloud in Caspian Region  Total international IP capacity is about 1 Tbps  There are two major hubs in the region – Russia and Turkey  International Internet routes are preferably focused to Europe Source: TeleGeography III. Transmission

15 What is the Cloud?IWhat is the Cloud3 The Cloud in the Caspian Region II 9 Eliminating the Disruption III15 VI 20Impact on the Caspian Region

16 Eliminating the Disruption To eliminate the disruption between content and access in Caspian region TTK focuses its efforts on:  Increasing the network capabilities to transmit IP traffic to major partners in CIS countries  Improvement of IP connectivity with global ISP  Development of own & partner data centers in Russia 2010: 40G, 3.2 Tbps

17 Increasing the Capabilities Source: Global Internet Geography, TTK’s progress in :  Transmitting capabilities across the country and between Europe and Asia reached over 100 Gbps  TTK international gateways with major neighboring CIS countries:  Kazakhstan – 2х10 Gbps  Azerbaijan – 10 Gbps  Ukraine – 10 Gbps  Belorussia – 10 Gbps  TTK is the leading Russian ISP by connectivity to global Internet and holds 20 th position among 50 Top international ISPs  IP up-streams to Europe 90 Gbps  In 1H 2010 TTK will install 40G systems in its DWDM network TTK Ranking among 50 Top International ISPs

Improving the Access  In mid-2008 TTK announced about retail project on Russian broadband market  By 2010 TTK develops and manages over 50 metropolitan area networks  Major cities: Barnaul, Chelyabinsk, Irkutsk, Izhevsk, Kemerovo, Khabarovsk, Krasnoyarsk, Nizhny Novgorod, Novokuznetsk, Novosibirsk, Omsk, Perm, Saint-Petersburg, Samara, Saratov, Tyumen, Ulyanovsk, Voronezh, Yaroslavl, Yekaterinburg  Number of broadband users reached ~ 100,000 and will increased up to 400,000 in 2010 TTK’s 50 MANs Projects in Russia 18

TTK offers a wide range of wholesale IP solutions for operators in CIS and Caspian regions:  Access to Russian Internet segment  Access to Global Internet via TTK IP network & up-streams  Transit to major IX in Europe (London, Amsterdam, Frankfurt, Stockholm, Moscow) and Asia (Tokyo, Hong Kong)  IP VPN / MPLS solutions for multinational enterprise customers  EPL channels to Russia, Europe and Asia  VoIP transit and termination 19 Solutions for the Caspian Region

20 What is the Cloud?IWhat is the Cloud3 The Cloud in the Caspian Region II 9 TTK: Eliminating the Disruption III12 VI 20Impact on the Caspian Region

21 Impact on the Caspian Region e-learning e-business e-government e-medicine

8 Testovskaya Str., Moscow, Russia, T: +7 (495) F: +7 (495) E: Thank you for attention! Cloud Telecoms: Simply Explained