1. Broadband World Should be Flat Victor Chiu Vice President, Telecom Labs Chunghwa Telecom Aug. 12, 2006

2. 2 3 National Development Plans in Taiwan 2002 2004 U-Taiwan 2003 M-Taiwan e-Taiwan project initiated in 2002 M-Taiwan plan in 2003 BB plan in 2004  6 million broadband households by 2008.  Plateform for Broadband applications and services.  FTTH and WiFi and Wi-Max e - Taiwan 6million broadband users e-Society e - Government - e-Industry e -Opportunity e-Taiwan

3. 3 Broadband Taiwan Broadband Chunghwa Telecom  CHT Broadband Market  Broadband market share ~ 87% (~4 million)  Fiber coverage over 90% in metro area  Household (2006/02)  7.3 million  Household PC penetration (2005/05)  81.4%  Internet bandwidth (2005/12)  109Gbps  BB plan in 2010  6 million broadband Users

4. 4 2000 2001 2002 2003 2004/2 2004/4 2004/6 2004/8 2005/4 512K 1M 8M 12M SpeedFee Evolution of Major Access Speed(Down Stream) 512K  1M  2M  8M  12Mbps  20M  100Mbps Access Fee per 100Kbps in CHT 2M CHT ADSL(12M) per 100Kb/s per Month Access Fee US$0.193

5. 5 CHT offers Triple Play Services on IPTV In March 2004, CHT has launched IPT, a bundled services including Video on Demand (VOD), Pay channel, live TV and other applications are offered. TV (A/V Stream) PC (Data) Telephone (Voice) STB ATU- R DSLAM Broadband IP network Multimedia service system Internet Telephone exchange Voice/data splitter

6. 6 CHT Network Operations System Service Provisioning Customer Interfaces Problem Management Networkand Quality Management Customers Integrated CHT-OSS ATU-R RDSLAM DSLAMBBRAS Router Server Cabinet Splitter Integrated NGOSS-based CHT OSS is for multi-vendor and various NEs  Access : ADSL, FTTB  Core : ATM, L2/L3 switches  Transport Network : SDH, DWDM and OADM  Internet : Broadband RAS, GSR, Servers  IPTV : HPER, True VOD/Live TV/KOD Servers ATM/GE SW Billing

7. 7 CHT Broadband Network Evolution 2005200620072008 2009 2010 FTTB+xDSL Ethernet-based FTTB & P2P Media Converter FTTH WiMAX / B3G 10M High Quality Internet Surfing Differentiated Service Triple Play Service 1G Network Quality Index Network Migration Path

8. 8 VoIP Functions Interactive End to end Functions VPN Functions CDN Functions Nomadic Functions Service/network control platform IMS Service-specific functions Sharing functions Core transmission network Access network User network Edge node Core node NGN Architecture Packet Switching Broadband Transport End-to-end QoS Open Interfaces Control signaling transmission network Communication Network Operation and maintenance network OSS Reference : APT NGN Workshop 2004 NTT RENA Architecture Exercise 5 Years Out:

9. 9 User Terminal VAS and the Mesh Ecosystem  Traditional telecom service value chain Carrier-CPE-User  VAS/IMS era demands a brand new Mesh Ecosystem User-based Cyberspace: (Home + Work + Leisure ) + Mobile Personal Portal Content Provision Service Provision IMS-based Infrastructure (Fixed Mobile Convergence) VAS (C-I-T-E) IMS

10. 10 Lessons learned in BB Services Schools lead the way, and consumers follow Affordable Tariff, lower and lower day by day Rapid Provisioning, Excellent Customer Care Excellent network Integration & Operations Lower Equipment Costs National Policy Evolution Plan From DSL, FTTB to FTTH Triple Play Services Amazon principle

11. 11 Flat world is a healthy ecosystem The telecom business world is flat, if the platform is open, or more precisely, if it’s a standard. In this flat world, the stakeholders, including customers, equipment vendors, content providers, telecom service providers could easily plug and play. With this in mind, a healthy ecosystem for telecom business might be formed and make all players in a win-win-and-win situation.

12. 12 IP Changes the Telecom World IP brings the Internet, the Internet world is converging with the telecom world. The Internet brings not only VoIP, but also IPTV and triple play. Telecom business is on the way to retire PSTN and head on to the broadband business based on IP.

13. 13 IMS is an open standard based on IP and SIP IMS (IP Multimedia Subsystem) is a standard and gaining increased momentum and will have a fundamental impact on telecom business. IMS is an open and standardized architecture based on IP and SIP (Session Initiate Protocol) for telecom business including fixed, wireless and cable services.

14. 14 The new competitive battlefield is in VAS (Value Added Services) The competitive battlefield is taking place in VAS (Value Added Services) and new applications for the end user of these services. Rich media content is here. The business and the technical issues - what to do and how to do it - are united. At the end, it is about a future world of broadband access anywhere to any content from any device and anywhere.

15. 15 Exercise 5 Years Out Through this flat ecosystem, everyone could run his own business, and the business is opened up to everyone else. The ecosystem makes world flat eventually. Exercise 5 Years Out -Mobile phone in your hand -Electronics in your living room -Your company -Your home -China and India, and also the USA

16. Thanks for your attention!