Telkom Sa Soc Ltd. · JSE:TKG
Telkom Sa Soc — Investor Day (July 2014)
37 slides from Telkom Sa Soc's investor day presentation, July 2014
Slide 1: Wholesale and Networks
2014 Wholesale and Networks Alphonzo Samuels Chief Technology Officer
Slide 2: Agenda
Agenda 01 Landscape 02 Service Challenges 03 Network Transformation 04 Transformation Programme review 05 Technology 06 Wholesale 2
Slide 3: Landscape
Telkom LANDSCAPE
Slide 4: Competitive Landscape
Competitive Landscape 01 The quality and reach of telecommunications infrastructure in South Africa has improved dramatically over the last decade. The most notable areas of improvement are: The number of undersea cables that have landed on our shores National and regional data backhaul networks
Slide 5: National Transmission Network Coverage
National Transmission Network Coverage 01 Telkom’s national fibre network • Telkom has more than 147,000 km of fibre (largest footprint in SA – critical to support a nationwide deployment) • 16,588 Fibre Distribution Points already enabling more than 100,000 services • 948,868 ADSL subscribers 5
Slide 6: National Mobile Network Coverage
National Mobile Network Coverage 01 • Telkom mobile 3G coverage reaches approx. 55% of the population • 2428 sites on air • 1165 LTE sites on air • 2426 WiFi access points 3G LTE 6
Slide 7: Global Reach Connecting Our Customers to the World 24/7
Global Reach Connecting Our Customers to the World 24/7 01 Submarine cables (3-2-3) Terrestrial fibre connects Satellite services 3 gateways out of the SADC countries • 3 major earth stations country (Yserfontein, International IPNet • Covering Africa Melkbosstrand, Mtunzini) • POP’s (London, 2
Slide 8: Service Challenges
Telkom SERVICE CHALLENGES
Slide 9: Drivers of Fault Rate and Repeat Report Rate (RRR)
Drivers of Fault Rate and Repeat Report Rate (RRR) 02 Cable Thefts Poor Vandalism Workmanship Seasonal Ageing “Voice Weather patterns grade” Network Internet Service Network Provider Fault Rate Performance & Repeat Report Rate Processes & Customer CPE Systems Customer Test systems communication Prod
Slide 10: Where are the faults / costs in existing network?
Where are the faults / “costs” in existing network? 02 No Fault Home Access Backhaul Core Cu Cable Legacy PSTN Softswitch IMS No fault found, Cu Fibre IPConnect Upfront or SAIX clears, Right ME Optical Fibre Cable when tested ISP 1 Fibre ISP 2 ISP 3 WWW When we tested it, or arrived at the customer,
Slide 11: Value Concentration and Geographic Challenges
VALUE CONCENTRATION AND GEOGRAPHIC CHALLENGES 02 Low income areas Low-mid income areas Mid income areas Mid-high income areas High income areas South Africa Johannesburg and Pretoria Cape Town Lesotho • 2% of South Africa’s area concentrates 50% of population and 77% of national income • Mid and hig
Slide 12: Vast geography and dispersed customer base makes for a unique challenge
Vast geography and relatively dispersed customer base makes for a unique challenge… 02 Area type Disposable income Broadband needs Target solution Urban corp. & • High bandwidth requirements • FTTB & PON • Very high business parks (> 100Mbps) SMMEs, branch • High bandwidth requirements • SHDSL, VDSL
Slide 13: Value Concentration and Geographic Challenges: Spectrum in the 700/800 MHz
Value Concentration and Geographic Challenges: Spectrum in the 700/800 Mhz 02 The propagation characteristics of spectrum Relative CAPEX required for network infrastructure investment <700MHz 708MHz 1,230% 850MHz 2,100MHz 5,800MHz Cell radius (km) 675% 0 2 4 6 8 10 455% 328% Number base stations 100
Slide 14: Network Transformation
NETWORK TRANSFORMATION July 2014 03
Slide 15: Telkom's Transformation Programme
Telkom's Transformation Programme A key enabler to drive Broadband expansion 03 Recap Telkom’s transformation strategy Voice centric Data centric Significant portion of the revenue coming from Revenue driven by data services (stabilizing voice (and declining) revenue or growing) Limited broadb
Slide 16: Strategic Considerations
Strategic Considerations 03 Recap • E10 Voice • EWSD Obsolescence • ATM Broadband • ADSL & Data • Diginet Consumer Revenue generation and Business • 60 : 40 revenue protection versus new revenue protection Wholesale • Utilities • Centralised Control & configuration Cost • Combo ports Cost & • Cost p
Slide 17: MSAN is the chosen solution to revamp the access network
Multi Service Access Node (MSAN) is the chosen solution to revamp the access network 03 The MSAN provides the ability to enable different service types, which target various segments from the same access node MSAN solution Four use cases differentiate four demand patterns International leading p
Slide 18: xDSL speed is influenced by copper thickness and its length
xDSL speed is influenced by copper thickness and its length 03 Maximum attainable speed in copper networks Maximum attainable speed for DSL technology1 MAS ADSL ADSL2+ VDSL2 (Mbps vs. meters) (meters) (Mbps) (Mbps) (Mbps) 24 580 m 8.0 23.9 63.6 20 1,160 m 8.0 22.1 30.9 2,320 m 7.7 13.8 14.0 16 2,552
Slide 19: FTTx broadband architecture is our chosen path
FTTx broadband architecture is our chosen path and best fit for SA 03 Revamp Access: The Options Central office Topology FTTC FTTx MSAN Central office to remote Outside Copper Fibre plant Remote to customer premises VDSL2 Omega Active ADSL ADSL2+ VDSL2 bonding B-PON G-PON Technology vectoring DSL Et
Slide 20: Transformation Progress
Transformation Progress 03 IT Operations FTTH (>100 Mbps) Revamp FTTC (40 Mbps) of access Local exchange upgrade Wireless, Fixed-Wireless and Fibre capabilities set and Satellite access Building a Service Orientated State of the Enhancement Increased aggregation capacity Architecture art network of
Slide 21: Current NGNEC rollout status
Current NGNEC rollout status 03 FTTC Active Ports = 574,288 FTTH/B Homes Passed = 1,733 I1 Revamp access I2 Enhance aggregation I3 Migrate voice Enable differentiated broadband Protect business data revenue Mitigate risks resulting from product Decommission legacy P&S end-of-life equipment FTTC
Slide 22: Transformation Programme Review
TRANSFORMATION PROGRAMME REVIEW FTTH / LTE MIX 04
Slide 23: Relative Network Transformation Investment sizing
Relative Network Transformation Investment sizing 04 Revamp of access Enhancement of aggregation IT Evolution of core The journey to a future-proof network is based on a comprehensive set of interventions. Investment in the revamp of access is the crucial last step and the most challenging 23
Slide 24: NGN and LTE answer the growing demand for higher bandwidths
NGN and LTE are able to answer the growing demand for higher bandwidths of several applications 04 Basket of services per bandwidth (Mbps) 100 60 VoIP Browsing OTT HD TV 2x HD TV 4k TV 50 50 40 30 30 30 20 15 10 6 6 6 3 3 3 0 10 Mbps 20 Mbps 40 Mbps 100 Mbps ADSL 2+ VDSL 2 G-PON Access network LTE c
Slide 25: Review of high speed broadband access using LTE as fixed wireless
Review in progress to provide high speed Broadband access using LTE technology in/as fixed wireless solution 04 Illustrative VDSL FTTH LTE Network coverage 25
Slide 26: Installing fibre to the home
Installing fibre to the home 04 GROENKLOOF HOUGHTON ESTATE BROOKLYN MORNINGSIDE PRETORIA RIVER CLUB JOHANNESBURG BRYANSTON Target SANDHURST 23 suburbs WESTCLIFF CRAIGHALL covered by ROSEBANK December 2014 CRAIGHALL PARK PLATTEKLOOF 2 PLATTEKLOOF ILLOVO 25,000 homes passed by Mar’15 PLATTEKLOOF 3
Slide 27: Network Topology showing Copper, FTTC and FTTH/B Access
Network Topology showing Copper, FTTC and FTTH/B Access 04 Copper loop / sub-loop Copper Filter xDSL Modem Copper Cable Filter Softswitch Exchange PSTN IMS FTTC Copper loop / sub-loop Fiber TCNet xDSL Modem Remote MSAN VPN Metro Ethernet IPConnect BRAS/BNG or SAIX Splitter GPON/ Active Ethernet Node
Slide 28: Technology
Telkom TECHNOLOGY July 2014
Slide 29: IMS Enablement
IMS Enablement 05 Access layer GSM Satellite Transport layer IMS core layer LTE PSTN HSS MRF SIP AS PCRF CSCF MGCF PRI ADSL SIP Trunk MSAN 29
Slide 30: End-state Network Access Topology
End-state Network Access Topology 05 Home Access Backhaul Core Cu Cable Legacy PSTN Softswitch IMS IPConnect or Cu Fibre SAIX ME Telkom Optical Fibre Cable Internet Fibre WWW Extend Ethernet / Metro Ethernet as close as possible to the customer, especially business customers 30
Slide 31: Wholesale
Telkom WHOLESALE
Slide 32: Principle provider of Wholesale Services
Principle provider of Wholesale Services 06 Strategy To become the Wholesale Provider of choice, a leader in Broadband and Connectivity Services - Your Partner in Business. Repositioning of Telkom Wholesale by: Secure long term agreements with key MCO's and OLO's Evaluate adjacent growth areas
Slide 33: Successful wholesalers have developed non-voice revenue
Successful wholesalers have managed to develop their non-voice revenue, both locally and internationally 06 1 Most of the wholesale revenue in mature markets is non-voice related 2 FTTH better allows incumbents to defend their investment Global wholesale markets 3 trends Fixed incumbents have an opp
Slide 34: Wholesale revenues in mature markets mostly non-voice
The current wholesale revenues in mature markets are mostly generated through non-voice products 06 Evolution of European incumbent wholesale revenue mix 90% Fixed voice 1 Fixed non-voice 2 Mobile 3 R bn Revenue 4 80% 77% 70% 71% 38.3 70% 63% 32.9 65% 47.6 38.5 57% 57% 60% 53% 16.2 14.0 51% 26.4 50%
Slide 35: Fixed and Mobile Penetration
Fixed and Mobile Penetration 06 Fixed tele density (subs / households) Mobile penetration (subs / population) Wireline 41.8% 138.8% 39.3% 129.1% 37.2% 114.5% 34.7% 32.6% 96.2% 31.4% 30.4% 94.3% 29.4% 92.0% 28.0% 87.8% 76.2% 63.1% 45.9% 43.9% 9.0% Mobile 7.8% 27.5% 6.6% 5.5% 4.0% 12.8% 3.1% Fixed 1.8
Slide 36: Commercialisation of New Products
Commercialisation of New Products 06 Telkom Wholesale is expand its connectivity offerings by strengthening its overall propositions with relevant value added services Sold by Telkom WHS Not sold by Telkom WHS Towers co-location Infrastructure Facility co-location City to City Intl. Fiber Optic Bits
Slide 37: End
Gy, 4 Telkom END