International Trends in Broadband Service ICTC International Forum Hangzhou, China October 20, 2016 Cable Television Laboratories, Inc. 2016. All Rights Reserved. 1
Topics Broadband Profile in the U.S. Broadband Competition Future Proofing HFC Networks Cable s Competitive Positioning Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 2
Broadband Profile in the U.S. Cable Television Laboratories, Inc. 2016. All Rights Reserved. 3
Cable Adds 1M+ Broadband Subs in Q1 2016 In Q1 2016 the top cable companies added 1,065,000 broadband subscribers 106% of the net additions for the top cable companies in Q1 2015 In Q1 2016 the top phone companies added 10,000 broadband subscribers compared to a gain of 160,000 in Q1 2015 AT&T and Verizon added 300,000 subscribers via U-verse and FiOS in Q1 2016, while having a net loss of 324,000 DSL subscribers In Q2 2016, cable grew by 648K subscribers while the top phone companies lost 342K subscribers Year-on-year growth of 7% for cable companies v. -1.4% for the phone companies Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 4
MSO Broadband Margins Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 5
Broadband Competition Cable Television Laboratories, Inc. 2016. All Rights Reserved. 6
US: 26M Homes Passed by Fiber 26 Million (~20%) of all U.S. HH passed by fiber 12.3 Million (~10%) of all HH connected by fiber a 50% uptake rate Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 7
Western Europe: 7.5% Connected to Fiber Telcos service just over 81% of the region's broadband homes (BB HH). Cable accounts for < 20% of BB HH. Only 7.5% of BB HH connected to Fiber The 3 largest BB markets (UK, France and Germany) have some of the lowest fiber penetration rates 7 countries in the region have more than 10% of BB HH connected to fiber. 2 markets - Sweden and Norway - have over 1/3 of BB HH connected to fiber. SNL Kagan, December 15, 2015; G.fast Speeds up Race between Fiber and DSL in Europe Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 8
APAC: Leads in FTTH with ~ 50% BB HH Japan Continued decline in DSL subscriptions, down to under 10% of the total fixed broadband market FTTx subscriptions are the majority of the fixed broadband market representing almost 2/3 of total fixed broadband subscriptions 90% of households with access to FTTx Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 9
Broadband Competition in the US Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2015. Rights Reserved. All Rights Reserved. 10
Google Fiber Gigabit Deployments San Francisco is the 22nd metro where we're going to serve customers Google Fiber had only ~53,000 video subs as of December 2015 That s about 1/20 th of 1 % of the U.S. pay TV market after seven years While broadband subscribers are larger estimated at ~360K as of December 2015 That s about 4/10 of 1% of US broadband subscribers MoffettNathanson 9/7/16 Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 11
Google Fiber Offers July 2015 Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 12
Google Fiber Offer Changes THEN 1Gb - $70/mo. $300 waived construction fee with 1 year commitment $100 waived construction fee with 1 year commitment NOW 100Mb - $50/mo. 1Gb - $70/mo. Add Fiber Phone to your plan for $10/mo. Google Nexus provided Download the Google Fiber TV app on your Android or ios devices Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2015. Rights Reserved. All Rights Reserved. 13
Google Fiber Recent Developments What is driving these strategic changes? Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 14
AT&T Gigabit Deployments 1 Gbps currently delivers 1 Gbps service to parts of 29 metro areas AT&T plans to deliver 1 Gbps service to 45 metro areas by the end of 2016 With plans to reach 67 metro areas in total with 1 Gbps service Committed to reach an additional 12.5M customer locations in 2019 http://about.att.com/mediakit/gigapower - August 2016 Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 15
AT&T Offers Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 16
AT&T Offer Changes with DirecTV Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 17
Verizon FiOS FTTH Deployments http://fiberforall.org/fios-map/ Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 18
Verizon FiOS Offers Cable 43 Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. http://www.verizon.com/home/fios-fastest-internet/ 19
Gigabit Competition Municipalities http://muninetworks.org/communitymap Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2015. Rights Reserved. All Rights Reserved. 20
Gigabit Competition 10 Gbps Services Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 21
Future Proofing HFC Networks Cable Television Laboratories, Inc. 2016. All Rights Reserved. 22
DOCSIS 3.1 HFC on Fiber Trajectory 10000 1000 DOCSIS 1.0 & DOCSIS 1.1 DOCSIS 2.0 DOCSIS 3.0 DOCSIS 3.1 100 10 1 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Mbps Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 23
DOCSIS 3.1 Cable Television Laboratories, Inc. 2016. All Rights Reserved. 24
DOCSIS 3.1 Overview A flexible and financially conservative solution to future proof the HFC network Supports 10 Gbps downstream and 2+ Gbps upstream First generation equipment will support at least: Downstream ~4.5 Gbps Upstream ~1.8 Gbps Second generation Will be able to take advantage of the full HFC spectrum, supporting up to 10 Gbps of capacity This creates parity with 10G PON downstream speeds Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 25
DOCSIS 3.1 Overview Interoperability and Efficient Migration DOCSIS 3.1 cable modems work with DOCSIS 3.0 CMTSs DOCSIS 3.1 CMTSs support DOCSIS 3.0 cable modems Both cable modems and CMTSs support "bonding within DOCSIS 3.1 and with D3.0 channels Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 26
Full Duplex DOCSIS 3.1 Cable Television Laboratories, Inc. 2016. All Rights Reserved. 27
Full Duplex DOCSIS 3.1 Overview Full Duplex DOCSIS technology can significantly increase upstream capacities Symmetric Gbps service tiers achievable Full Duplex DOCSIS technology leverages DOCSIS 3.1 technology to speed development and reduce cost Will enable the future DOCSIS 3.1 network to provide 10 Gbps symmetrical speeds Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 28
Full Duplex DOCSIS Overview Intelligent Scheduling Self Interference Cancellation at CMTS RF isolation between CMs Full Duplex DOCSIS Technology 29Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 29
Full Duplex DOCSIS 3.1 Overview Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 30
Full Duplex DOCSIS 3.1 Overview TIME Example: DOCSIS 3.1 Frequency Division Duplex Different Spectrum Downstream and Upstream 5 MHz to 85/204 MHz Upstream 108/258 MHz to 1218 or 1794 MHz Downstream 0 MHz SPECTRUM 200 MHz 1800 MHz Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 31
Full Duplex DOCSIS 3.1 Overview TIME Simultaneously use the same spectrum for Downstream and Upstream 0 MHz SPECTRUM 200 MHz 1800 MHz Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 32
Cable s Competitive Positioning Cable Television Laboratories, Inc. 2016. All Rights Reserved. 33
MSOs Offering 1 Gbps Broadband Service DOCSIS 3.0, DOCSIS 3.1 and/or FTTH Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 34
US Gbps Deployments Comcast Altice U.S, (Suddenlink) Service Details Comcast has rolled out Gigabit internet using DOCSIS 3.1 and fiber is select markets. The 1 Gbps service is priced at $70/month for 36 months (promo) or $140/month without a contract. Plans to cover entire footprint by 2018 Using DOCSIS 3.0 technology to deliver the new 1 Gig offering. With equipment upgrades and channel bonding, we are able to deliver more than 1 Gig to the modem ; sells for $99 per month as a standalone service. Other broadband speeds increased to 100 Mbps and 200 Mbps. Plans to cover entire footprint by 2018 Where Atlanta (today) Nashville (today) Chicago (today) Detroit (H2 2016) Miami (H2 2016) Multiple locations across the US Midco 1 Gbps branded Midco Gig. Goal is to cover entire footprint by end of 2017 Cox Leveraging a mix of GPON-based FTTP technology and extend into the remaining area of its market using DOCSIS 3.1-enabled equipment when it becomes available.. Minnesota North Dakota South Dakota Baton Rouge Las Vegas New Orleans Phoenix San Diego Virginia. Mediacom Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. Mediacom plans to start rolling out 1 Gbps Internet speeds to its residential customers by the end of 2016. The company charges $149.99 a month for the service (Missouri) and there is a data usage allowance capped at 6 terabytes a month Rolled out the service in parts of Missouri in 2015 offering customers an 1 Gbps download/50 megabit-per-second upload option. 35
International Gbps Deployments Service Details Where Liberty Global (Europe) Rogers (Canada) Videotron (Canada) DNA (Finland) TDC (Denmark) In August, 2015, Mike Fries said he expected 40% of Liberty Global s network in the U.K. and Germany would be D3.1-ready by the end of 2016, and 80% of its full footprint outfitted for the new platform in about three years. Last October Rogers announced a commitment to deliver Gigabit service to more than four million homes in Ontario and Atlantic Canada by the end of 2016. The company announced gigabit home internet earlier this year, pushing it out over the new DOCSIS 3.1 standard Videotron is deploying DOCSIS 3.1 in the greater Montreal area launching a 940 Mbps/50 Mbps for $108.14 per month ($149.95 CAD). Began deployment of DOCSIS 3.1 in 2016. Expects to pass 500K homes by the end of 2016, the substantial majority of its network. TDC is planning to extend DOCSIS 3.1 service availability to its entire footprint by the end of 2017. Germany UK Toronto Ontario Atlantic region Montreal Quebec Finland Denmark Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 36
Comcast Gigabit Services In 2015, Comcast launched its residential, fiber-based, multi-gigabit service Gigabit Pro with symmetrical 2 Gbps speeds. Gigabit Pro is now available to 18 million homes across the country. In February 2016, Comcast unveiled plans to offer Gigabit Internet service using DOCSIS 3.1 technology in Atlanta and Nashville in early 2016, with Chicago, Detroit, and Miami to follow. Initial customers in Atlanta will have the choice of a promotional contract price of $70 per month for 36 months, or an every day price with no contract at $139.95. Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 37
Cox Communications Gigablast Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 38
Cable s Competitive Impact In 2014, 95% of broadband subscribers with >100 Mbps download speeds purchased their service from cable television service 16% across cable providers v. 4% across FTTH providers Demonstrating that cable providers offer a superior price/value relationship Cable is the only network technology gaining broadband share over the past four years Legacy DSL (negative broadband growth) Upgraded DSL (VDSL2/pair bonding) and FTTH (decelerating growth) Cable now has 62% share of the broadband market and gained 218% of broadband additions in Q2 2016. Cable Television Cable Television Laboratories, Laboratories, Inc. 2016. Inc. All 2016. Rights All Reserved. Rights Reserved. 39
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