Everything or zero? Triple Play Symposium Gary Kim

Nobody has 10 Years In Western Europe and in North America, broadband revenues exceed PSTN voice by Informa

Huge Shift Coming

A Strategic Investment … Not Necessarily the “ Best ” Use of Reinvested Cash … Without FTTH, no business left Invest, trade market share with cable Platform then in place for other stuff not invented yet

No Business Case? Gross revenue 40-$100/month? – Provider “net” is 50% of gross ($20-$50) Stranded assets – Cost per passing = cost per sub? No! FTTH $1000/passing At 33% penetration, $3000/customer Install $700/customer CPE $700/customer (3 set top boxes)

The “ Mah Margin ” Problem Basic cable 40% Premium (“pay”) 20% or less Pay per View 10% or less Long tail IPTV? (what would you guess, based on all the other numbers?)

Change from the Outside Buying Controlled Here User Need Determined Here Fax migrates to home. But , cheap broadband, cellphone, SMS, Web, Instant Messaging migrate into the enterprise. “ Analog ” executives “ Digital ” employees Digital executives Digital employees

How to Build a $500 Billion Annual Revenues Business Start with a $1 trillion annual revenues business Lose 7% a year In 10 years, you have a $500 billion annual revenues business Telcos are losing lines at 5-6% a year Wireless, downsizing has saved them so far

How to Build a $2 Trillion Annual Revenues Business Create new applications – Cable TV$50 Billion – Movies, Games, Music$157+ Incorporate, embed in new segments – System integration/support $284 – Oracle$66 – SAP$64

If You ’ re Going to Do It …. Remember what the cable execs say: – “In a competitive market, the lowest cost provider wins.”

IPTV Isn ’ t the Solution: But it ’ s a Start … Thanks!