3rd Annual Broadband Wireless World Forum 2001, February 19 - 21, Moscone Center, San Francisco. 1...

3rd Annual Broadband Wireless World Forum 2001, February 19 - 21, Moscone Center, San Francisco.

1

The German Broadband Access Market

Christian Golaszewski, COO


2

The German Broadband Access Market

• Market opportunities• BWA• SMEs• ASP

• Broadband access technologies• CAGR• Value proposition• Performance• Capex/Costs• Business Concept

• Case Study WLL : STAR 21 NETWORKS • Network Topology• PMP- Licenses in Germany• Base Stations• Backbone • Strategic base: Products• Positioning, Strategy, Success Factos, Vision


3

Market opportunities


4

European Broadband Access Fundamentals

German broadband access revenues(1) (US$m)

European broadband access revenues(1) (US$m)—2004

Note: 1 Refers to broadband internet access onlySource: IDC, 2000

3,975

3,441

374384392

710852

1,094

2,264

0

1,000

2,000

3,000

4,000

5,000

Germ

any

UK

Fran

ceIta

ly

Spai

n

Nethe

rland

s

Belgi

um

Switz

erla

nd

Swed

en

208

730

1,552

2,553

3,975

0

1,000

2,000

3,000

4,000

5,000

2000

2001

2002

2003

2004

CAGR 109%


5

The SME market opportunity

1999 European SME market(1)2000 German SME market distribution

Source: IFM, Statistische Jahrbuch, AZ BertelsmannNotes:1 International analysis performed on SMEs with

10–499 employees only 2 SMEs with 5–499 employees

497

184 182150

118

0

100

200

300

400

500

600

Germ

any

UKIta

ly

Fran

ce

Spai

n

Num

ber

of

SM

Es

(00

0s)

837

340

214156

67 5916

0

300

600

900

Tota

l SMEs

(2)

5-9

10-1

9

20-4

9

50-9

9

100-

499

>50

0

Number of employees

Num

ber

of

SM

Es

(00

0s)


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Note: *SMEs and all their regional subsidiaries The German ASP Readiness is calculated by dividing German ASP market size by total German IT spending.

Source Ovum March 2000, AZ Bertelsmann, Gartner Group, Andersen Consulting Analysis, EITO

The ASP acceptance of SMEs is rising steeply in Germany making it very attractive emerging market segment

0

40.000

80.000

120.000

2001 2002 2003 2004 2005

Low IT Spenders

Medium IT Spenders

High IT Spenders

German SME companies willing to purchase ASP services, 2001 – 2005*

CAGR 01-05

154,1%

2.706

8.781

54.181

26.082

112.844

The ASP market opportunity


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Broadband Access Technologies


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74,00%

105,00%118,00%

0,00%

20,00%

40,00%

60,00%

80,00%

100,00%

120,00%

140,00%

DSL Cable FWA

Broadband Access Connections

1999 2000 2001 2002 2003 2004

DSL 1k 111k 324k 586k 805k 1015k

Cable 6k 7k 13k 32k 69k 123k

FWA 0k 16k 87k 172k 266k 363k

Germany – Broadband Access Connections, 1999-2004Business Customers

CAGR 2000-2004


9

Medium(licences and roof-rights)

Medium

Medium

High

30 – 35%

High(2Mbps – 15Mbps)

High

WLLHigh

(unbundling)

Medium

Medium

Medium

30 – 35%

Medium(384Kbps – 2Mbps)

Low

DSLRegulatory hurdles

Upfront costs

Capex requirements

Scalability(marginal costs)

Potential operatingmargins

Capacity

Predictability of servicequality

Medium(rights-of-way)

High

High

High

30 – 35%

High(>10Mbps)

Very high

Fibre

Value Proposition


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CAPEX/Mbps/Site

$0

$100

$200

$300

$400

$500

$600

$700

3rdgen.

2nd gen. DSL BWA PtP FO

Capex/Mbps

Access Technology Costs

$0

$20k

$40k

$60k

$80k

$100k

$120k

DSL BWA PtP FO

Capex per Site

$160k

2nd Generation BWA Fills the Gap Between Fiber and DSL

Capex/Technology Costs

(Free space laser)3rdgen.

2nd gen.(Free space laser)


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Where are we going?

2 M 8 M 10 M 100 M 1 G

Consumer

SOHO

SME

LE

Corporate

PtP

BWA

Radio

CopperXDSL

Access Speed

ATM

Ethernet

?WAN

LAN

Local Loop Customer Segments

Technology

Fibre &OpticalWireless


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Case Study PMP-WLL STAR 21 NETWORKS

The Broadband Solutions Company


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ISPN

ISP1

Basestation

802.3

IP service platform

RFC 1483 (bridged and routed)

ATM

Server

Server

Internet

IP

802.310BT

802.310BT

AAL5ATMWLL

ATMSTM1 STM4

IP filter routing

AAL5 AAL5ATM ATMSTM4 STM4

N*E1

STAR 21 Network

ATMWLL STM1

PSTN

Server

ATM Core

ATM Forum UNI/NNI PVC

ATM Forum UNI/NNI PVC

IP Service TerminationUNI/NNI PVC

SAP

ServiceAccess Point

Today’s Service Architecture


14

PMP-WLL Licenses in Germany

PMP potential:221 licenses for „Point-to-Multipoint“-radio throughout Germany:• 183 licenses for 26 GHz• 38 licenses for 3,5 GHz

Roof Right Portfolio:450 locations for base stations

Business potential:• Coverage of about 60 Million German• residents and more than 850.000 companies • Licenses in top urban areas, such as Berlin, Bremen, Dresden, Dusseldorf, Frankfurt, Hanover, Leipzig, Magdeburg, Mannheim, Munich, Nuremberg and Stuttgart


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Base Stations Parameters

Radius of 3.5 km at 26GHz, up to 10 km at 3.5GHz

Bandwidth per base station

• up to 384 Mbits downstream

• up to 288 Mbits upstream

Bandwidth per licence

• 14MHz per 3.5GHz licence

• 28MHz per 26GHz licence (56MHz in 9 key areas)

Up to 144 customers (2 Mbits) per base station

Typical base station coverage Highlights


16

Rainy Days Case Study: Frankfurt

0

25

50

75

100

31-Jul-00 07-Aug-00 14-Aug-00 21-Aug-00 28-Aug-00 04-Sep-00

(%)

BS

CPE

Connectivity

SLA-Line

Frankfurt base station coverage

• STAR 21 NETWORKS offices

• Plusline (local Frankfurt ISP)

• Computer Training

• WebHits

• Controlware (Customer outside of Frankfurt connected via PTP radio)

Availability of Frankfurt base station


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Infrastructure: Backbone

• Highspeed Fiber-Network to supply all 221 license areas with bandwith close to terabit range• 35 Points of Presence (Pops)

Example of a breakout point

Core Switch, ADM n x E1

SwitchFriendly voice carrier switch

Core Switch

n x E1 Switch

IP service platform

Router

Server FarmHosting / ASP

Router

Peering internet Router

Friendly voice carrier switch

Example of a POP


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Interconnection Set-Up

PBXVoice

WLLBase

Station

SAP

Backbone

STM-1

STM-1STM-4

STM-16

E1 CES

E1 CES

STM-1

Voice

InternetSTM-1,100BaseT

Router

PC

10BaseT

Backbone:• ATM: Asynchronous Transfer Mode• DWDM: Dense Wave Division Multiplexing • Transfer rate up to the terabit range


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Product Roadmap

Network-Products

Applications

Strategy

Fixed bandwidthFlexible bandwidthLAN-to-LAN connectivityFrame relay

Fixed bandwidthFlexible bandwidthLAN-to-LAN connectivityFrame relay

IP-based VPNVoice servicesBack-up lines

IP-based VPNVoice servicesBack-up lines

Voice over IPVoice over IP

LANs-/WAN- ManagementSoft-PBX

LANs-/WAN- ManagementSoft-PBX

Network Service Provider

E-Mail solutionsWeb- development and -hosting

E-Mail solutionsWeb- development and -hosting

ISP + IT Service Provider

Standard applicationsDatabase serverData back-up

Standard applicationsDatabase serverData back-up

Vertical portalsVertical solutionsVideo-on-demand

Vertical portalsVertical solutionsVideo-on-demand

Day trading centresBusiness TVFacility management

Day trading centresBusiness TVFacility management

ASP Content Provider

Business Solution Provider


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Company vision:STAR 21 NETWORKS aims to become one of the leading European providers of data communication, internet and application services for City Carriers, Internet Service Providers (ISPs) and SMEs.

Leading edge technology:

„Wireless Local Loop” access and a high-performance fiber backbone serve as our technical platform to provide dynamic broadband connectivity and high-value „end-to-end“ services.

Competitive advantage achieved by: High quality standards, innovative service solutions, short

installation times and low prices.

Positioning


21

Market entry as Broadband Access Provider

•Leased Lines and Access Service

•Focus: Wireless Local Loop (WLL ), „Point-to-Multipoint“-radio (PMP)

•Partner and provider for City Carriers, ISPs and cable companies

Strategy

Developing into a Full Service Provider

• Innovative bundled services for telecommunication and data transfer

• Building a high-speed fiber backbone and continuously increasing the number of base stations

•Target group: „small and medium enterprises“ (SME)Positioning as Application Service Provider (ASP)

•Network computing, ERP-modules, office applications

•Building a powerful data center for hosting and for providing application services

•Vertical solutions for specific SME demands


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• Leading edge technology: High quality end-to-end services conforming to top security standards

• Solution oriented services:Products and services tailored to individual customer needs and enhanced by consulting services

• High-value one-stop-shopping:Innovative bundle of products and IT-services from one supplier

• Dynamic and individual scalable broadband services:Fast and reliable bandwidth services in Germany and in selected European regions

• State-of-the-art services:Providing application services of high customer value to reduce IT-costs and to increase our customers‘ competitive power

Our success factors


23

Our Vision

We improve our customers' competitive position We improve our customers' competitive position by delivering the communication and application solutions of the 21st by delivering the communication and application solutions of the 21st

century. century.

STAR 21 NETWORKS STAR 21 NETWORKS The Broadband Solutions CompanyThe Broadband Solutions Company

www.star21networks.dewww.star21networks.de

3rd Annual Broadband Wireless World Forum 2001, February 19 - 21, Moscone Center, San Francisco. 1...

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