PowerPoint template

1
Haut Debit (High Speed) Opportunitiesin France
International Trade Seminar SeriesWITEC Event
January 10th, 2007Drew McNaughtonDirecteur
General, COVAGEand CTO Axia NetMedia
2
Agenda

• France Overview
• France Basics
• Why France ?
• Axia in France COVAGE
• The Opportunities
• Fibre
• Hosted IP Services
• Wireless
• Other
• The Challenges
• Business culture
• Administration
• Personal
• Summary
• Questions / discussion

3
France Overview
4
France Basics

• Demographics
• Population is 18 X larger
• Area is 4/5 of Alberta
• 427 cities over 20k
• Politics
• Central policies with de-central administration
• 22 regions
• 96 departments
• 177 agglomerations
• 36,000 towns/cities

FRANCE
5
Why France ?

• Open, deregulated telecommunications market
• Pent-up demand for broadband and IP services
• Favourable political climate FTTx, triple play,
  DSL
• Enormous funding for broadband 3B euros and
  growing
• Practical transportation systems same day
  business
• TGV 300km / hr regional rail
• Paris Metro/ RER
• Frequent multiple airports / airlines
• Huge market 61M people in Metro France
• Very organized around broadband deployment

Best broadband fit after Alberta
6
France Telecom Market

• Government forced France Telecom to de-regulate
  in 1996
• xDSL is hotly competitive 21 different players
• Highest fixed line penetration in europe
• Fibre backbones are only between big cities
• Wireless (WI-MAX)- now licensed across 22 regions
  
• Wi-fi becoming popular with many projects
• ARCEP - regulator is active, knowledgable and
  engaged
• Mobility is a big and growing market
• Triple play very popular TV Internet Phone
  -gt 30 euros/month
• FTTx is a very hot political topics now
  multiple projects
• Neutral Open Access Networking public private
  fibre networks

Perfect for an IP based business
7
Convergence Driving Real Broadband
RealBroadband IP Network
Telephone Network
Broadcast Network
Triple Play is very popular in France
7
8
Axia in France COVAGE

• June 2003 - Initial contact through one
  consultant
• -gt Alberta SuperNet reference was
  critical lt- hired an experienced
  France based consultant just to
  manage the relationship
• May 2004 - MOU with initial partner - Marais
• April 2006 - MOU with evolved to larger partner
  Vinci
• Sep 2006 - COVAGE 50/50 partnership agreement
• Nov 2006 won large Seine et Marne project
  - COVAGE branding launched..

3.5 years to evolve partnership
9
Axia In France Current Networks
Arras

• Active networks
• Arras
• Cosne sur Loire)
• Creusot Montceau
• Seine et Marne (WiFi)
• Toulouse
• Moselle
• Under construction
• Caen
• Manche
• Chalon
• Recent Wins
• Sicoval
• Clermont-Ferrand
• Seine et Marne
• Angoulême

Caen
Moselle
Manche
Seine et Marne
Cosne sur Loire
Creusot Montceau
Chalon
Angouleme
Clermont- Ferrand
Toulouse
Sicoval
50 more projects in next 2 years
10
Recent Network Seine et Marne
Community / Customers

• Departement with population of 1.25 million
• 514 communities east of metropolitan Paris
  region
• 52,000 businesses including the EuroDisney
  business complex

Project Overview

• initial build cost is 74.5M euro less 30.4M euro
  in govt grants
• 20 year DSP contract to operate and provide
  wholesale services
• 2 years to finish construction starting
  January 2007
• 1100 kilometres of fibre 33 WiMax base
  stations
• first services (WiMax) scheduled for August
  2007
• first bandwidth services expected January 2008

Market is 50 of Alberta
11
The Opportunities
12
Typical France Network
Calgary BasedHosted Services
Paris BasedHosted Services
Internet
Calgary Resources
Local Router

• Local Access
• Fibre loops
• Copper (DSL)
• Wireless

FibreBackbone
FTTB-Businesses
Hospitals
Government
Homes
Schools
Opportuntity Export Alberta Technology
13
Open, Competitive IP Access
Real Opportunity is here
Access, Servicesand Content
Several service providers competing
Network (Active)
One neutralservice provider
AXIA must stay here
Physical Infrastructure (Dark Fibre)

• Carriers
• Provincial
• Municipal

CommunityAssets
Neutral provider policy creates the opportunity
14
Broadband Network Uses
Source NBN Industry Networking Presentation
Applications IP standard priorities different
15
Opportunities Hosted IP Services

• Hosting services
• support from canada
• Host in europe or france
• Many high quality centres
• Market is looking for alltypes of services
• VOIP for the cost savings
• Fast internet access
• Security
• Backup/Storage
• Education
• Health Care
• E-Government

Demand is growing as networks go live
16
Opportunities Wireless

• Wireless backhaulWimax 802.16 3.5GHz
• Distribution Wifi802.11 2.4GHz
• Equipmentsupply
• EngineeringServices
• Consulting

Wireless is in every network solution
17
Opportunities Broadband Examples

• Gigabit capacities have enabled high speed
  backupsover long distances
• Emergency response systems are being implemented
• Large public WIFI installations La Manche
  examplewith 5000km2 WIFI mesh network
• Media content centre in Angouleme
• Health care emergency links for home care
• E-government initiatives
• Collaborations in health care and education

No real limit to the opportunities
18
The Challenges
19
Challenges Business Culture

• Language is critical
• Business is relationship based lots of face to
  face
• Socialist government / culture affects many
  things
• - hours of work- structure of the work day-
  time to hire / fire- vacations- administration
• Style is indirect not direct
• Being patient, polite, conservative is the norm
• Canadians are generally well received but dont
  act like an aggressive american
• Processes following them is not a priority
• Intelligence / complexity the french enjoy
  complexity and individual approaches to problem
  solving

you are not in Kansas any more
20
Challenges Administration

• Hiring people takes a long time and not simple-
  employees do not change often- minimum notice is
  90 days- prefer working for a french company-
  cost to employer is high at 60
• legal help quite good can be acquired
  affordably
• Accounting / tax is different need local help
• Payroll can be done as a service affordably
• Buying behaviour
• Stable typically slow to switch-
  Conservative- Takes a long time to do deals /
  contracts
• Paying bills / invoicing on time is a major deal

Get local help right away
21
Challenges Personal

• Learning the language is difficult (Quebec not
  always good)
• Written language is 10x more complex
• Moving / living is very, very expensive 1.8x
  Calgary
• Schooling is expensive and difficult
• Administration can be very frustrating
• Service levels vary greatly
• Paris is a huge city crowded / lots of traffic

but worth the pain
22
Keys to Axias Success

• Alberta Supernet was/is a global reference
• We partnered with a France company
• We adapted we became French
• Leverage resources (systems, processes,
  people) from Calgary
• We were patient

We knew we had a good story tenacity
23
Summary

• France is a huge market worth pursuing . now
• Culture is the biggest barrier to entry need to
  adapt
• Must partner with a french company to be
  successful
• Need to make the investment with a local presence
• It takes time . so enjoy the wine

Thank you
24
Questions/Discussion