Download Time Warner Telecom

October, 2003
Michael Rouleau
SVP – Business Development
[email protected]
Agenda
• Time Warner Telecom
• Key Strategies and Direction
• Time Warner Telecom Product and
Roadmap
• Success
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2
Time Warner Telecom
A Unique Set of Network Assets
 Greater than 17,000 local and regional fiber route miles across 44 markets
 Nearly 3,700 buildings lit with fiber based services
 National footprint interconnected with fiber and an IP backbone
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3
Time Warner Telecom’s
Houston Network
Houston
• 853 Route
Miles of Fiber
• 179 Buildings
On-Net
• Hundreds of
Buildings
Passed
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4
Time Warner Telecom
Channel and Operations
• Channel Management
• Direct Sales Executives
– Major Account Executives
• Carrier Focus
– National Enterprise Account
Executives
• Fortune 1,000
– Account Executives
• “Unfortunate” 5,000
– Associate Sales Executives
• SME Customers
• Data Overlay Group
– Regional Data Specialists
• Partner Channel Activities
– Cisco Powered Network
• Metro Ethernet Emphasis
• Operations
• Field Operations
– Customer Service Support
Employees, Field
Technicians
– Optical, Voice and Metro
Ethernet Expertise
• National Operations Center
– Provisioning, Monitoring,
Management
• Tier 1, 2 & 3
– Internet Service NOC
– Engineering
•
•
•
•
VoIP
IP Services
Optical
Metro Ethernet
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5
Time Warner Telecom
Strong Financial Performance
• 2003 YTD Financial Results:
– $327.785 Million in Revenue
– $98.823 Million in
POSITIVE EBITDA
• Financially Disciplined
Our Revenue Mix Is Increasingly
Enterprise Focused…
8%
– Fiber facilities based
provider
– THE last mile solution into
many buildings
– 41 Class 5 switches
– 12 Markets with Media
Gateways and Softswitches
Enterprise
Carrier
– 17 Consecutive Quarters of
Positive EBIDTA
– Manageable Debt Structure
• Metro Focused
9%
45%
38%
ISP
Intercarrier
Comp
While Data & IP Revenue
Grew 10% 2Q03 over 2Q02
Time Warner Telecom 2Q03 Results
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6
Current Communications
Industry Trends
• Enterprise customers are
building an increasingly diverse
provider base
– More than 70% of customers
use more than one provider for
services
• Customers are increasingly
price conscious
– 36% of customers are likely to
switch local services
– 75% of Verizon customers and
65% of Qwest customers would
switch for better price
• Data Services offer higher
retention
– Commoditization is occurring
– Customers churn less for price,
more for Customer satisfaction
issues
# of Communications Providers Used
Four or
More, 33%
Three, 12%
One, 29%
Two, 26%
Data Service Churn
Very Likely
Somewhat Likely
Neither
Somewhat Unlikely
Very Unlikely
0%
20%
2002
40%
60%
2003
Morgan Stanley Telecommunications Services Survey,
June, 2003
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7
Current Customer Behaviors
• Customers looking for high quality providers
to augment/replace current providers
– Must have fairly complete bundle
– Multiple provider strategy gives customers options
in meeting all of their communications needs
– Robust data offer wins
• Customers demanding better ROI/TCO
– VoIP
– Metro Ethernet
• Customers demanding SLAs & QoS (with
network tools, monitoring, management and
visibility) as “ticket to play”
– Managed Services
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8
Market Trends
Implications For Time Warner Telecom
• Metro Ethernet
– Market Leadership with comprehensive portfolio
strategy
• 3 Services to meet customers’ applications and spending
needs
– Product Extensions underway – Long Haul, 10G
• Target enterprise customers for Intranet
• Layered services – Internet access and VoIP
– Challenge – Reach more buildings “off-net”
• Voice over IP
– Calculated deployment strategy
• Phase 1 – ISP Offload (3/01)
• Phase 2 – Class 5 Replacement (1Q02)
• Phase 3 – Next Gen Service Offerings (under dev)
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9
Native LAN Services Architecture
10/100
10/100
E/SW
Switched NLAN
E/SW
DWDM
Ethernet
SW
GE
CDNLAN
DWDM
10/100
GE
 Point-to-Point Implementation
 Unmanaged, Aggressively
Priced Solution
 10, 100 or 1,000 Mbps
10/100
Cisco
15454
SONET
NLAN
Cisco
15454
SONET
NLAN
Cisco
15454
E/SW
Customer Direct NLAN
FE/GE
GE
FE/GE
DWDM
GE
 Any-to-Any Connectivity
 Ideal Implementation for Internet
Access
 Fully Managed Solution
 Protected Network
 10, 100 or 1,000 Mbps
Switched
GE
Ring
NLAN
Cisco
15454
10/100
Cisco
15327
10/100
10/100
Cisco
15327
Ethernet over SONET NLAN
 Premium Point-to-Point or
Multipoint Implementation
 Protected Service
 Shared or Dedicated Ring Options
 Fully Managed Solution
 10, 100, 622 or 1,000 Mbps
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10
Metro Ethernet Access Speeds
Metro Ethernet Service Comparison
Time Warner
Telecom
Bell
South
SBC
Qwest
Verizon
ATT
MCI
XO
Yipes
Cogent
On Fiber
44 Markets
22 States
9
States
14
States
14 States
3 States
69 Cities
Internet in 10
Cities
5 Markets
40
Cities
10
Cities
21 Cities
12 Cities
10 Mpbs
50 Mbps
(SONET)
100 Mbps
150 Mbps
(SONET)
300 Mbps
(SONET)
622 Mbps
(SONET)
1 Gbps
Markets
Applications
ESCON
Fibre
Channel
Transpare
nt LAN
Internet
Access
Source: IDC May, 2003; Time Warner Telecom May, 2003
Available
ICB
Not Available
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11
Product Roadmap
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12
New Technology Influences
Strategy and Direction
• Voice over IP
• Virtual Private Networking & Security
• Wireless
– WiFi – 802.11a/b/g, 802.16
• Storage Networking
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13
Time Warner Telecom
Product Direction
VoIP
Value Add
Apps
 IP Centrex, SIP Phone Support, SIP/H.323 Trunks, VoIP LD
 Security Services, VPN, etc.
 Extended NLAN (Ethernet over MPLS; any-to-any)
IntraNet NLAN (Ethernet over SONET; PT-PT, MultiPoint)
and
IP Access Switched NLAN (Ethernet over Fiber; any-to-any)
Customer Direct NLAN (PT-PT, 10/100/1,000 Mbps)
 Complete (or near)

In Progress
 Planned (Future)
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14
Long Haul Native LAN Service
Gig-E Ring
TWTC NLAN
MPLS
Tunnel
TWTC
IP Backbone
MPLS Tunnel
Long Haul Native LAN
 Leverage Existing IP Backbone,
MPLS
 Fully Meshed Network Between all
44 Markets
 Scalable – 2 Mbps to 1,000 Mbps
 Introduce New VoIP Bundles –
Long Distance, Voice VPN
Gig-E Ring
TWTC NLAN
SONET
Ring
* Under Development
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15
VoIP - Regional Network
Oracle DB
Server
Element
Management
Server
Application Notes
TWTC IP Backbone
City 2
Softswitch
Call Control
City 3
Softswitch
Call Control
Server 2
STP
STP
Region
1 Cities
SS7 Gateway x 2
NFS/NTP x 2
Media Gateway x
N
STP
Server 2
STP
Region
2 Cities
SS7 Gateway x 2
NFS/NTP x 2
Media Gateway x
N
Region
3 Cities
STP
Ethernet & IP Switch x 2
STP
Server 2
SS7 Gateway x 2
NFS/NTP x 2
Media Gateway x
N
Ethernet & IP Switch x 2
City 1
Softswitch
Call Control
Ethernet & IP Switch x 2
 Converged Network
Infrastructure – Voice and Data
Networking
 Distributed Media Gateways
and SS7 Servers
 Regional Softswitch Call
Control
 Centralized Feature Server
Control
Redundant
 Cap and Grow Class 5 Technologies
 Efficient Network Deployment Optimizes CapEx Spend
 3 Phase Approach To Packet Telephony:
- ISP Offload (3/01)
- Class 5 Replacement (1/02)
- Next Gen VoIP
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16
Future VoIP & NLAN Integration
SIP & H.323 Trunking
TWTC Central Office
Gigabit Ethernet
PSTN
Native
LAN/Metro
Ethernet
SONET
Packet Telephony
Switch
SIP Phones
10/100 Mb NLAN
IP PBX, Gatekeeper
* Under Development
 Ethernet transport carries VoIP to the PBX, desktop
 Support for SIP & H.323 trunking services
 QoS over Switched and SONET based Ethernet services
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17
VoIP Long Distance
Better
Connections
Between
Company
Sites!
Application Notes
TWTC IP Backbone
MPLS Tunnel
 Leverage IP Backbone to carry
long distance voice – market-tomarket
 No impact to customer
operational network
 QoS via MPLS implementation
 Support for customer on-net
traffic
 Support for Voice VPN
PSTN
San
Diego
PSTN
ABC Company
Packet Telephony
Switch
Corporate HQ &
Branch Office
Packet Telephony
Switch
Houston
* Under Development
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18
Time Warner Telecom
• Time Warner Telecom’s Track Record of Success
Means…
• Broad Fiber Optic Reach
– Over 17,000 Route Miles of Fiber
– Metro Ethernet available to Nearly 3,700 Buildings in 44 Markets
• Financial Strength to Grow in Tumultuous Market
• Product and Service Innovation
– Industry Leading Data & IP Services
• Metro Ethernet, IP Networks, VoIP
Tomorrow’s
Network…TODAY!
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19
Thank You