2. OCTOBER 2, 2001 BROADBANDING THE PHILIPPINES A Close Look at the Philippine Broadband Market and Available Broadband Technologies Nerissa S. Ramos AVP – PLDT Business Solutions

3. 2 Outline Broadband Market – What are the major drivers? End User Behavior – How will User Preference shape the Broadband Landscape? Internet Access Options – What fits? The DSL – The Broadband Answer? Philippine Broadband Market – Are we Ready for the Broadband Challenge?

4. OCTOBER 2, 2001 The Broadband Market What are the Major Drivers?

5. 4 Major Shifts in Communication Industry E-business Mobile voice and messaging Internet 2000's1990's Driver: Mobility Driver: Ubiquitous information sharing Driver: New business models DriversDrivers Services and platforms have their own evolutionsServices and platforms have their own evolutions E-businesses are verticalE-businesses are vertical

6. 5 Major Shifts in Communication Industry World Wide Web Text Graphics Audio Video E-Mail FTP Text Based Chat (IRC) Streaming real time text and/or graphics. e.g. Weather and Stock quotes On-Line Shopping On-line Banking Web Surfing Interactive Games Music on Demand Video on Demand Interactive Distance Learning Video Phone Video Chat Room Tele-services (Medicine, Gov’t, etc. Streaming real time Audio. e.g. News/ Music Streaming real time Video. e.g. News/Sports

7. 6 Global Broadband Access Markets by Technologies Broadband subscribers by access technologies (000) 2000200120022003200420052006CAGR xDSL4,40012,10026,95046,20069,30096,800121,00074% Cable5,50011,50018,00028,00040,00055,00069,00052% Wireless8002,0005,00011,00020,00034,00047,00097% Satellite4001,1002,4004,2006,5009,30012,00076% FttH/SME2001,3003,0007,00016,00028,00050,000151% Total11,30028,00055,35096,400151,800223,100299,00073% Cumulative DSL connections expected to exceed cable modems in 2001 / 2002 DSL will be the global market leader at 40% by 2005 Fiber-to-the-Home and to SMEs significantly higher than expected earlier

8. 7 Phil. Broadband Market Technology Breakdown

9. 8 Phil. Broadband Market Score Card SOURCE: Pyramid Research

10. 9 Phil. Broadband Market Broadband Regulatory Environment NTC has adopted a ‘ technology neutral ’ framework As a result, the broadband market shows signs of early maturation as operators are provisioning broadband service across multiple technologies

11. 10 Phil. Broadband Market Infrastructure A lack of local loop infrastructure will introduce delay broadband growth if not overcome Mainline penetration is currently 7%, putting it just ahead of the more populous China (at 6%) CATV infrastructure is also limited and CATV penetration (0.9%) is well below China or India (8.2% and 2.8% respectively) Coax will therefore not provide a badly needed alternative to the PSTN local loop and connectivity will have to come via wireless technologies Fixed-wireless broadband infrastructure is scant but growing Satellite networks are still mostly targeted towards the corporate market.