Everything 2.0 2 or zero? Triple Play Symposium Gary Kim gary@dagdamor.com

Everything 2.0Everything 2.02 or zero?2 or zero?

Triple Play SymposiumTriple Play Symposium

Gary Kimwww.voipweekly.com

gary@dagdamor.com

Nobody has 10 YearsNobody has 10 YearsGlobal Carrier Revenue, 2011

500

410Voice $ Billions

Broadband $ Billions

In Western Europe and in North America, broadband revenues exceed PSTN voice by 2009 --Informa

Huge Shift ComingHuge Shift Coming

A Strategic Investment…A Strategic Investment…

Not Necessarily the “Best” Use Not Necessarily the “Best” Use of Reinvested Cash…of Reinvested Cash…

Without FTTH, no business leftInvest, trade market share with cablePlatform then in place for other stuff not

invented yet

No Business Case?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” ProblemThe “Mah Margin” Problem

Basic cable 40%Premium (“pay”) 20% or lessPay per View 10% or lessLong tail IPTV? (what would you guess,

based on all the other numbers?)

Change from the OutsideChange from the OutsideBuying Controlled Here

User Need Determined Here

Fax migrates to home. But Email, 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 How to Build a $500 Billion Annual Revenues BusinessAnnual Revenues Business

Start with a $1 trillion annual revenues business

Lose 7% a yearIn 10 years, you have a $500 billion annual

revenues businessTelcos are losing lines at 5-6% a yearWireless, downsizing has saved them so far

How to Build a $2 Trillion How to Build a $2 Trillion Annual Revenues BusinessAnnual 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….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:IPTV Isn’t the Solution:But it’s a Start…But it’s a Start…

Thanks!