Seminar to China cable and telecom operators about the evolution of broadband industry.

1. Broadband Business
beyond learning from the US
Xiaolin Lu
CEO
Morning Forest, LLC
xlu@morningforest.com
February 26, 2004

2. What is this all about?
 China Cable Industry is being “unleashed” from
government but still a “spoiled” baby in the cradle.
 MBA does not help, but the street-smart might.
 What and where is the business, and does it have
to repeat everything US did?

3. AGENDA
 Business Environment: US Example
 Video Business
 High-speed Data Business
 Voice Business
 Networks
 Our Perspectives

4. 1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
500
0
30-Jul-82
11-Feb-83
26-Aug-83
09-Mar-84
21-Sep-84
05-Apr-85
18-Oct-85
02-May-86
14-Nov-86
29-May-87
11-Dec-87
24-Jun-88
Doubles in 8 years
06-Jan-89
21-Jul-89
02-Feb-90
17-Aug-90
01-Mar-91
13-Sep-91
27-Mar-92
09-Oct-92
23-Apr-93
05-Nov-93
1983 - 2001
20-May-94
02-Dec-94
Doubles in 4 years
16-Jun-95
29-Dec-95
12-Jul-96
Doubles in 2 years
24-Jan-97
08-Aug-97
20-Feb-98
Doubles in 1 year
04-Sep-98
19-Mar-99
01-Oct-99
14-Apr-00
27-Oct-00
Moore’s Law of Nasdaq
12-Mar-01
Source: CSFB
20-Apr-01
31-May-01
11-Jul-2001

5. The Present State of Telecom
 Telecom was more tightly linked to the dot-com
industry than most people realized
 Unrealistic optimism set in everywhere
 Disproportionate cost structure and revenue opportunity
 Abundant available capital along with major shift
of regulatory policy resulted in:
 Fierce competition
 Over capacity
 “Innovative” practices fueled the fire:
 Vendor financing, capacity swaps, round trips
 Revenue = receivable + inventory

6. Business Environment:
US Example

7. COMMUNICATION IN US
Long-Haul Metro Access
“Unregulated” “Unregulated” Regulated or
Semi-Regulated
 AT&T  MSO
 Worldcom  ILEC
 Spring  CLEC
 Qwest

8. REGULATION AND BUSINESS
VOICE DATA VIDEO
 Communication  Information  Content
Regulation Services Services Service
 Title 2  Title 1  Title 6
Requirement  Open Pipe  None  Franchising
Business  Selling Minutes  Flat rate  Flat rate
+ Usage

9. THE RESIDENTIAL PIE - 2000
Cable Dominates ILECs Dominates Cable Leads
Video Market Voice Market High-Speed Data
Market
Video Voice Data
Cable ILECs Other
Source: Paul Kagan Associates

10. Ten Year Performance
Improvement
WAN Bandwidth 2 2000
Processor Power 2 1000
Router Engine Performance/Price 1 1000
Internet Traffic 2 1000
Bandwidth to Homes 3 13
Sources: 1. Business Communications Reviews, Sept. 1997
2. AT&T
3. Dataquest

11. NETWORK TRAFFIC
1000
Voice
800
Data
Traffic (Gb/s)
600 Total
400
200
0
1990 1995 2000 2005 2010
K.G. Coffman and A. Odlyzko
AT&T Labs

12. LOOKING FORWARD: TRIPLE PLAY
2002
Data
$28B
Cable Voice
ILEC
Video
 SDV
 VoIP $75B $128B
 VDSL
 Standard based equipment
 IP Infrastructure
 OSS/BSS
 New Services

13. OPPORTUNITIES: TRIPLE PLAY
 Create a customer destination
 Reduce churn
 Create differentiation
 Build a common platform for innovation and
gain economy of scale
 Increase ARPU (Average Revenue Per Unit)
 Offensively and defensively change the nature
of services and products

14. BUSINESS COMPARISON
Comcast x Cox x Gehua
Subscriber (M) 21.0 2.3 6.1 0.7 9.0
Revenue ($M) 8,079.0 169.0 5,038.6 105.4 47.8
Operation Cost ($M) 3,511.0 131.7 2,130.9 80.0 26.7
Gross Margin 57% 58% 44%
EBITDA Margin 35% 35% 24%
Revenue/Sub ($) 384.7 72.4 826.0 155.4 5.3
EBITDA/Sub ($) 134.9 79.0 291.7 170.7 1.7

15. OPPORTUNITIES AND ISSUES
US China
Telephony: $25
HSD: $52.95
VOD& DVR: $9.95
HDTV: extra $5
Digital Tier
$50.44, $60.44, $68.44,
$78.99, $93.99
Ext Basic: $40.49 HSD: $15
Basic: $13.44 Basic: $2.5
US China
Network/HHP $175 $175
CMTS/Sub $8 $35
CM/Sub $40 $100

16. BUSINESS VALUATION
US x China
ARPU/month 57.34 3.8 15.00
Gross Margin 57% 44%
EBITDA Margin 35% 1.5 24%
Multiple 16 1.6 10
Value/Sub ($) 3,853.2 8.92 432.0
EBITDA/Sub 150.00 88.2 1.70
Debt/EBITDA 4 4
Debt/Sub 600.00 88.2 6.80

17. KEY ISSUES
Business Opportunities
Operations
Reality
Regulatory
Environment
Cost Structure
( technology platform)

18. VIDEO

19. VIDEO: GOING DIGITAL!
Total Households
110 111
100
106
100
90 Analog Only Houses 89
82
80 Total Digital
Today
70
70
Digital Cable
60 59
50
45
40
36
Satellite Digital
30 30
25 22
20
Analog Only
10
5
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source = Kagan 2000 Databook

20. DIGITAL CABLE SUBSCRIPTION
25
20 Cablevision
Cox
Million
15 Adelphia
Charter
10 Comcast
AOL TW
AT&T
5
0
4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
00 01
Source: UBS Warburg

21. US CABLE DIGITAL PENETRATION
40
35
% of Basic Sub
30
25
20
15
10
5
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
00 01 02
Source: UBS Warburg

22. VIDEO DISTRIBUTION SYSTEM
Video
Analog Terrestrial Analog Digital
On
Video Digital Video Video
Services Services Services Services
Demand Customer
Server
Premise
Television
Interactive
Set-top
Video Services
Inband
Gateway
Conditional Access,
Multiplexing,
Modulation
Internet Return Nodes
Data
Channel
Application
Servers
Forward
Interactive Data Hubs
Back-Office Communication Channel
Systems Servers
Network
Control Digital HFC
Headend Network

23. OPENCABLE ARCHITECTURE
OCI-H1 Operations
Security
OCI-H2 Module(s) OCI-C2
Internet
Content OCI-N OCI-C1
Video Headend Consumer
Content Devices
Other
Content
Supporting
Hardware
and Software
OpenCable Device

24. STRATEGIES
Increase Subscription Rev$
Expand
Non-TV Ad Market
“Video”
Pie
Get Paid To Carry Content
Transaction Revenue
“Video”
Growth
Strategies Recapture DBS Subs
Recapture Tape Rental
Capture
“Video”
Share Get Ad Share From B’Cast
Own The Content

25. PRODUCT EVOLUTION
ITV
Digital Penetration
HDTV
Extended VOD/PVR
VOD
Digital Plus
Digital Basic
Time

26. INTERACTIVE TV MARKET
40,000
35,000
30,000 Interenet TV
25,000 Direct Response
$M
Internet Portals
20,000
IPG
15,000 VOD
10,000 T-Comm
5,000
0
2001 2003 2005 2007 2009 2011
Source: Kagan

27. WHAT’S CHANGED?
 Revenue Projections
Profit Loss
• Advertising
• T-Commerce
• Walled Garden Fees
 Services
• Consumers Like
• Consumers Will Pay for
 Costs
• Integration
• Maintenance 1999 View 2002 View
Revenue Cost

28. There Still is a Model, it’s Just Different
 Minimize Cost of Receiver
• Small Footprint Implementations
• Offload Processing to Proxy Servers for Low Cost Receivers
• H2O for HTML / JavaScript on Very Low Cost Receivers
• Minimize Code Size
 Network Solutions
• Balance Traffic Between In-band Push and out-of-Band Pull
• Monitor Traffic and Performance
 Maximize Integration with OSS and BSS
• Minimum Infrastructure, Integration and Operation Costs
• Evangelize Server Side Standardization
• DVB, Cable Labs, BSS Vendors

29. THE NEW FOCUS
Focus on Services that Provide High Value to Consumer,
but Low Cost to Provide:
 Information, Weather, Stocks, Sports Scores
 Enhanced TV, Player Stats, Multiple Camera Angles
 Shopping on Shopping Channels
 Games of Skill and Parlor Games
 Voting
 Communication Services
Focus Must be Simple, Fast, and Remain TV Centric

30. COMMUNICATIONS
Multi-Platform Communications, Provides Interesting
Opportunity:
Messaging Voice Solutions
- SMS
- Unified Messaging - Voice Activated Dialing
- Instant Messaging - Voice Controlled
- Voice Mail Messaging

31. SHORT MESSAGE SERVICE
TV Based Messaging
Sweden
 75% of Mobile Users in Spain
Europe Use SMS
Italy
 Currently, Over 12b SMS
Messages are Sent Each France
Month
Germany
 European Wireless Operators
Generate 5%-15% of Their UK
Revenues from SMS Services
0% 10% 20% 30% 40% 50%
Current Likely
Source: Forrester, January 2002

32. FUTURE
 Television on Demand
 VoD, SVoD, Network and Local PVR
 Convergence of Voice, Data and Television Offering
 Beyond Digital TV Infrastructure
• Roaming Between Digital TV and Other Networks (e.g. Cell
Phone, Internet)
• Universal Messaging, Single Sign-in, Digital Passport and Wallet
• Extension to New Networks
• Home Area Network, Car Information and Entertainment Systems
 Beyond Entertainment
• In-house Health Care, Distance Learning

33. CRITICAL ISSUES
 The ITV Model has Changed, but is Still Attractive
• Revenue
• Reduce Churn
• Fits Well and can Promote Other Services
• High Speed Data
• Voice
• Maintaining Simple, Fast, TV Centric Service is a Must
• Cost Effective Hardware and Middleware is Required
• Scale Platforms is Essential to Keep Costs Down and to
Facilitate Application Development

34. HIGH SPEED
DATA

35. Subscribers (M)
Q
1-
19
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
Q 99
3-
19
Q 99
1-
20
Q 00
3-
20
Q 00
1-
20
Q 01
3-
20
Q 01
1-
20
Q 02
3-
20
Q 02
1-
20
Q 03
3-
20
Q 03
1-
20
Q 04
3-
20
Q 04
1-
20
Q 05
3-
Global DOCSIS High Speed Data
20
Q 05
1-
20
Q 06
3-
20
Q 06
1-
20
Q 07
3-
20
07

36. HIGH SPEED ACCESS
North American
100
90
80
70
HP (Millions)
60
56
50 51
48
44
40 40
36
30 30
20 22
13
10
7
0
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Marketed Cable HSD HP Marketed DSL HP Other Subs Total HSD Subs
Source: Kagan

37. SPLIT THE PIE: 2001
US Only
Other
DSL 2%
32%
Cable
66%
Source: Kinetic Strategies

38. CABLE MODEM SUBSCRIBER
12
10
Adelphia
8 Cablevision
Million
Charter
6 Cox
Comcast
4 AT&T
TW
2
0
4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
00 01
Source: UBS Warburg

39. Why is DOCSIS 2.0 Compelling
 Can Reduce Overall Capital Investment of
Upgrade
 Even in Upgraded Plant, Larger Statistical
Area is Superior Design
 Reduces CMTS Cost Burden on HSD and
VoIP
 Amortize router blade across more customers
 Plants are Achieving High Penetrations
 How will they perform
• Without filters
• With Voice and other low latency services

40. MARKET DYNAMICS OF DATA BUSINESS
A Land Grab For 40 Million Existing Narrowband Subscribers
1994 2002 2007
$0.6 B $28 B $55 B
Advertising
Content 5.4
E-Commissions
15.4
0.24 7.9 0.6 15.7
0.32 13.9 19.8 4.1
$5.0B
57% Access 50% Cable
18% $9.9B
36% Cable
18%
 Increasingly difficult to capture value merely with access fee
 Key sources of future value in the data business
 Advertising
 Ability to close the transaction
 Data business starts to look a lot like the video business

41. IP INFRASTRUCTURE
OSS
Server
Farm Managed HFC Network
CMTS CM
IP Network (DOCSIS)
Many IP Technologies DOCSIS Standard
 MPLS/VPN/BGP
 Optical Networking
 Advanced OSS/BSS
Packet Cable Standard
 Standard based end-to-end solution
 Operation and scalability are the keys
 New business model

42. VOICE

43. Voice Isn’t What It Used To Be…
1994 2002 2007
$93 B $149 B $170 B
Residential Residential
local LD
44.3 30.8 43.6 23.7
39.3 39.7
73.7
103
13.7
Total 15% 50% 60%
Cellular
 Cellular has already captured 50% of the value in a decade
 Cellular has blurred the traditional residential-business segmentation
 The residential wireline business is under significant pressure

44. REDEFINE VOICE SERVICE
Average Monthly Phone Bill: Constant
$
Vertical Services
CallerID, VoiceMail,
Integration, etc.
Price competition Access to voice Product Differentiation
network (Local,
Toll, LD, etc)
Time
VoIP
 Low-cost bundled offering
 Web based provisioning
 Persistent voice
Benefit to Consumer Benefit to Cable
 Convenient  Differentiation
 Lower cost  Customer retention
 More service value  Additional revenue

45. VoIP OVER CABLE NETWORK
MTA CM CMS
MS
HFC Network CMTS
(DOCSIS)
Managed MGC
IP Network MG PSTN
MTA
SS7
CM
SG
HFC Network
CMTS
(DOCSIS)
OSS 

TGS
DHCP & DNS
Server  TFTP or HTTP
Farm  RKS
 Provisioning
CMS: Call Management server MGC: Media Gateway Controller
MS: Media Server MG: Media Gateway
SG: Signaling Gateway

46. CABLE TELEPHONY SUBSCRIBER
2.5
2
Million
1.5 Cablevision
Cox
1 AT&T
0.5
0
4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
00 01
Source: UBS Warburg

47. Worldwide VoIP Forecast

48. PacketCable 1.x Architecture

49. PacketCable VoIP Solution
CMS E-MTA
DOCSIS
1.1
GATE HFC
Ctrl Network
E-MTA Announcement
CMTS
Server
CMTS Managed IP Announcement
Controller
DOCSIS 1.1 Network Announcement
HFC Network Player
Media Gateway
Controller
GR-303 Media PSTN
DNS RKS TFTP V5.2 Gateway Gateway
OSS Functions: Gateway
Signaling
Provisioning, Gateway
Security, SYSLOG DHCP TOD
Record Keeping
PSTN
SNMP KDC
LDS

50. EVOLUTION
Broadband Full Service Platform
DOCSIS Open Cable Packet Cable
 High speed  Universal set  End-to-
End-to-end IP
cable modem top box platform
UPGRADE
 DWDM  Capacity
 RF  Quality
 DSP  Reliability

51. NETWORKS

52. IN THE PAST ...
Voice = Communication Video = Entertainment
LEC Cable
 Twist Pair Star  Coax Tree-and-Branch
 Feature rich POTS  Broadcast video
 $84B “toll collection”  $24B “$1 buffet”
 Monopoly
 Voice-oriented
 DLC, ISDN
 FTTH

53. PERSPECTIVES
Network
 Connectivity Service
 Communication
 Resource Sharing
 Entertainment
 Convergence
Media Topology Control
 Copper  Star  Central Mind-Set
 Coax  Bus  Distributed  Bell-Head
 Fiber  Ring  Self  Net-Head
 Radio  “Cable Guy”

54. CHANGING PERSPECTIVES
Bell-
Bell-Centric Mosaic
Network  RF Modem  Standard based
 “Proprietary”  DSP Performance  Capacity
 Fiber Optics  Service enabler
 Circuit
Applications  Bandwidth
 Internet  Broadband
 Feature-
Feature-rich  Multimedia  Service Package
Voice Router performance

 Network enabled or
 Connection  LAN extension
independent
Business  Telecom Reform
 Market maturity &  Competition
 Monopoly
growth

55. OPTIONS
LEC
 Narrowband
 Switched  DLC
 Rebuild
Wireless
 Mobility FTTH
 Broadband
Cable
 Network Upgrade Deep Fiber
 Broadband
 Broadcast
 Cable modem Penetration

56. CHALLENGES
HE FN
HE FN
HE
FN
Analog Emerging
TV Services
5 50 500 750 1G
 Bandwidth Capacity: 5-40MHz/1000s HHP upstream
 Transport Integrity: Ingress noise, dynamic range
 103-to-1 Architecture: Centrally-mediated MAC

57. SOLUTIONS
Bandwidth UPGRADE
Capacity  Fiber Node
Network
Segmentation
 DWDM Trunk
Transport
Integrity DOCSIS
 High level
modulation Modem
 Centrally-
103-to-1 mediated MAC
Architecture

58. Fiber Node Segmentation
HE FN
1,200 Homes
 Long cascade coax bus shared by many users
(1000s)

59. Fiber Node Segmentation
300 Homes 300 Homes
HE FN
300 Homes 300 Homes
 1,200 HHP/FN with 300 HHP/Bus

60. DISTRIBUTED HEAD-END
HEAD-
HE
FN
Primary Primary
Hub
HE
Ring
FN
HE
 Operation complexity
 Cost of CMTS at lower take rate

61. CMTS SCALABILITY
ADC Arris Cisco
Motorola Juniper Terayon
850
Minimum Medium Maximum
 Chassis-based CMTS has 750
the most advanced 650
features & can simplify the
metro routing architecture 550
$$/Mbps
450
 Desired configuration favor
centralized approach 350
250
150
2 LCs Chassis Rack
80-400Mbps 400-1600Mbps 1200-3840Mbps
* Cost is calculated based on combined upstream and
downstream capacity, and core-redundancy
configuration

62. DWDM TRUNK
SH
FN
Primary Primary
Hub
SH
Ring
FN
SH
 DWDM transport for end-to-end transparency
 Route diversity for service protection
 Consolidate high-end terminals (CMTS)

63. DWDM TRUNK
Primary Hub Secondary Hub
1.3mm
XTR
Coarse
WDM
l
1 x 8 DWDM
1 x 8 DWDM
l
l
. .
.
.
. . Fiber Node
1.5mm RCV
RCV l
1 x 8 DWDM
1 x 8 DWDM
RCV l
RCV
.
. .
.
. .

64. TRADITIONAL HFC INTERCONNECTION
64 SYSTEM HEADENDS
4 PRIMARY HUBS
0 SECONDARY HUBS

65. SECONDARY RING HFC INTERCONNECT
2 MASTER HEADENDS
9 PRIMARY HUBS
56 SECONDARY HUBS

66. MODERN HFC NETWORK
SH FN
Primary Primary
Hub
SH
Ring
SH FN
DWDM Transport Segmentation
End-to-end Transparency 4X capacity

67. ARCHITECTURES
Tree-and-Branch
 Broadcast FN
 Cascaded
???
Cell-Based
 Narrowcast RN
 Clustered

68. FIBER OPTICS ?
Node 2,000+HP 1,200HP 600HP 200HP 100HP
Size
HOW Deep ?
HOW To ?

69. EVOLUTION
Demand
Bandwidth per Customer
Take Rate
Applications
User Behavior
Push Fiber
Deeper
Split Nodes
Higher RF
Efficiency
Time

70. Fiber Optics for Cable
108 FTTH
107
FTTC (102 HP/node)
106
Fiber termination
105 FSA (103 HP/node)
100 ch AM
104
103
102
40 ch AM
86 92 00 06
Broadcast Two-way Broadband

71. mFN
SH
mFN mFN
PH
CMTS SH S
mFN mFN
SH
 mFNs replace all coax amplifiers XTR XTR XTR
 Less active components
 More bandwidth and flexibility WDM PON
 Deep fiber penetration with cell structure
 Optical add/drop to daisy chain mFNs
 Reduced fiber management & labor
 Provisioning for growth
 Distributed processing at mFN

72. ADVANTAGES
 Operation Savings
 61% reduction in active components
 Reduced power consumption
 Simplification of maintenance
 Improved Performance
 Reduced ingress noise funneling (10-48MHz operation)
 Increased RF bandwidth
 Improved reliability
 Future Proof
 Flexibility between current track and future opportunities
 Improved QoS and further cost reduction

73. OPERATION SAVINGS
 Current Network: 5.5 actives/mile

74. OPERATION SAVINGS
 61% reduction in active components
 21+% improvement in reliability

75. COST COMPARISON
Category Fiber Deep 860 Fiber Deep 600 HFC
Headend/Hub Optronics $3 $3 $3
Field Optronics $6 $6 $6
Pow er Supplies w ith Pow er Coax $1 $1 $2
Actives $0 $0 $6
Passives $7 $7 $7
Coax $20 $20 $20
Hardw are $0 $0 $0
Splice & Activate Coax $2 $2 $2
Turn up and Test $1 $1 $2
Project Mgmt & Design Engineering $1 $1 $1
Taxes & Freight $1 $1 $2
Labor $23 $23 $25
Material $19 $19 $26
Cost Total $42 $42 $51
Saving 17% 18%

76. Network Comparison
20,000 Home Example
Item Traditional mFN Network Reliability
Power Supplies 60 19 100.000%
99.995%
RF Amplifiers 905 0
99.990%
99.985%
Optical Nodes 42 225
99.980%
99.975%
Total Active Devices 1,007 244
99.970%
Traditional mFN
Active Per Mile >4 <1
Cascaded RF
Amplifiers
5 0 10 Year Operating Costs ($M)
$6.00
Network Reliability 99.98% 99.999%
$5.00
$4.00
Power Cost 10 Years $762,260 $244,680
$3.00
Maintenance Cost 10 $2.00
Years $4,693,333 $1,173,333
$1.00
$0.00
Traditional mFN

77. Network Buildouts - Cable
30
25
Homes (Millions)
20
15
10
5
0
AT&T AOL-TW Comcast Charter Cox Adel Cblvsn Rogers Mcom Insight Classic
2-Way Homes Homes Not Upgraded Source: Kagan
 Majority cable networks complete upgrade by EOY 2003.
 Next network frontier is to establish scalable interconnection.
 Intelligent optical networking technology will play important role

78. OUR
PERSPECTIVES

79. GENERAL OBSERVATIONS
 UK leads Europe and World in Digital
Penetration
 US is more Focused on VOD and SVOD
 Europe Leads on ITV applications
 Interactive Voting, Gaming, Multiple Camera Angles,
Theater Tickets

80. TRIPLE PLAY
2010 Projections
50%
45%
40%  Triple Play and Double
35% Play is Predominant in
30%
Europe
25%
20%  UK is Projecting to be
15% 90% Double or Triple
10% Play by 2010
5%
0%
UK Europe
Triple Double Single

81. OUR FOCUS
 Financial Focus
 Can the operation generate enough cash to service the
debt, cover ongoing capital needs and ultimately build
equity
 Service Offering
 We Believe in the Triple Play
• However, service mix is extremely situation dependent
– Capital structure
– Regulatory
– Competition
– Demographics and income
 Critical Technology Investment Timing

82. SERVICE APPROACH
 Digital Video
 Favor an open approach
 Precise investment that can be returned varies
 Low level interactivity and gaming is interesting
 SVOD also shows opportunity
 High Speed Data
 Favor converged platform based upon DOCSIS
 Huge Proponents of DOSCIS 2.0 capabilities
• More Mbps per Line Card = Lower Cost Per Mbps and
Lowe Cost Per line for VoIP

83. SERVICE APPROACH - cont
 Voice
 Favor a disruptive approach to voice
 VoIP as a transport
 Not a one for one match for ILEC
 Feature rich, i.e., web based features, whisper alerts,
persistent voice applications
 Minimize powering exposure
 Flat rate billing

84. TECHNOLOGY TIMING
Lead/manage
Migrate to
innovation
next
Capability
Standardize Improve
/De facto the scale
COST
 Technology platform is time dependent
 Time to lead, time to push standards, time to extend E-o-
Scale.

85. Cardinal Consideration for
Technology Investment
 Matching capital investment to market
potential
 150+ startups for cable @ $400M+/year burn-rate
 CMTS revenue < 30% CMTS vendors R&D spending
 VCand technology communities need to
understand service companies’ business
and operations

86. GLOBAL PESPECTIVES
 Communication Industry recovery relies on both the
cost structure and revenue opportunities.
 We Strongly Believe in Cable Broadband Business
 Think That Europe and Asia Offer Some Attractive Opportunities
 Changing the nature of services and the dynamics of
service delivery is key to expand the market and
achieve economy of scale
 The Triple Play is a Powerful Offering, But
 Is situation dependent (e.g., infrastructure, legacy issues, etc)
 Needs additional fine tuning (ITV strategy, Voice strategy, HSD strategy)
 Technology deployment is time-critical