Transcript 360 List Pricing Update

Partnering with Education and
Research
Katherine Beal
GM, Carrier Products
360networks Confidential
Agenda
• 360networks Overview & Post-Bust Strategies
• History of partnering with research and education
• Products & Architecture
• Q&A
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Overview
360networks delivers high-quality, low-cost, telecommunication
services via our powerful North American network
• We are a major facilities-based carrier with long-haul and metro
presence throughout the United States and Canada
– 29,000-mile North American network
– 69 North American markets served
– 46 US markets
– 23 Canadian Markets
– 36 North American cities with metro presence
• Our US focus is wholesale bandwidth services
– Targeting carrier and large enterprise customers
– Private line and wavelength services
• Group Telecom provides Canada with a competitive spectrum of
telecommunication services
– Traditional voice and data products, as well as IP Transit
– Over 13,000 Commercial and residential customers
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History & Milestones
• 360networks’ origins date to 1987, forming as the telecommunications
subsidiary of one of North America’s largest construction concerns, Ledcor
Industries
• Since 1987, we’ve designed and built optical networks for companies such
as AT&T Canada and Bell Canada, as well at 10,000 route miles of our own
network
• Voluntary restructuring in 2002 allowed 360networks to significantly reduce
debt without compromising operational delivery and success
– Reduced our debt from $2.7 billion, to $215 million upon emergence
– Refocused strategy to serve solely the North American sector
• Acquired Group Telecom in February 2003
– Canada’s largest independent competitive telecommunications provider
– Strong metro and regional presence throughout Canada
– Offers voice and data services to the small, medium, large enterprise and carrier
customers
• Acquired Dynegy Communications in May 2003
– High capacity broadband network spanning more than 16K route miles throughout the US
– Access points in 44 US cities
– Metro presence in 13 US cities
• Submitted Asset Purchase Agreement for Touch America Private Line &
Internet Business (~ 60 Days to Close)
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Financial Strengths
360networks is a consolidator, successfully navigating troubled
Telecom waters
• Solid revenue base
– Recurring revenue approaching $14 million per month
• Bank approved business plan
– Our rationalized network will take $28 Million annually out of our cost structure
– Cash-positive EBITDA in 2004.
• High degree of liquidity
– Greater than $63 million of cash with no net cash burn
• Successfully restructured balance sheet with low degree of financial
leverage
– $215 million of debt
– Interest based on LIBOR plus five percent
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Valued Customers
• Carrier Customers:
– AT&T Canada, Big Pipe, Fusepoint, Infonet, Microsoft, MTS,
Navigata, Peer 1 Networks, Sprint, Telus, T-Systems, Universal
Access, Videotron, Call Net, CP Railway, HydroOne, KMTS, Qwest,
Telus, Thunder Bay Tel
• Research & Education Customers
– Canarie Inc, Canarie Atlantic, GTaNet, Canadian Universities &
School Boards
• Commercial Services Customers:
– Cisco, EBay, Electronic Arts, PricewaterhouseCoopers, Bank of
Montreal, Scotia bank, RBC Dominion Securities, TD Bank, Alberta
Energy, American Express, Bombardier, Allstate Insurance
• Government Accounts:
– Gov’t of Canada, Gov’t of Newfoundland
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Post-Bust Strategies
• Take Advantage of Consolidation Opportunities
– Leverage financial sponsorship to augment our network and services with
attractive acquisitions
• Focus on Financials
– Cost Reduction
– Success-based investment in network augments
• Cost-Based Pricing for Future Success
– Cost + margin based pricing
– Cost efficient network architecture facilitates pricing advantage
– Positioned to replace inventory
• Provide Flexible Partnership & Deal Structures
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Network Footprint
Edmonton
St. John’s
NFLD
Saskatoon
Kamloops
Vancouver
Winnipeg
Calgary
Victoria
Seattle
Kelowna
Thunder Bay
Regina
Portland
Boise
Sacramento
Salt Lake City
San
Fran
San
Jose
Kansas City
Denver
St. Louis
Las Vegas
Stratford
San Bernardino
Los Angeles
Dark Fiber POP
Metro Networks
Regen / Potential LH POP
Lit Services Route
Lit + Dark Fiber Route
Dark Fiber Route
Metro Partners Ready
Newark
Halifax
Lynn
Boston
Hartford
Stamford
New York
Richmond
Nashville
Birmingham
Jackson
Mobile
San Antonio
Houston
Raleigh
Charlotte
Atlanta
Tallahassee
Austin
KEY
Buffalo
E. St. Louis
Memphis
Fort Worth
LH POP
Saint John
Albany
Toronto
Dallas
Phoenix
San Diego
Moncton
Pittsburgh
Detroit
Tuckerton
Princeton
Cleveland
Philadelphia
Indianapolis
Baltimore
McLean VA / Wash DC
Cincinnati
Omaha
Fresno
San Luis
Obispo
Ottawa
Chicago
Ogden
Oakland
Sudbury Montreal
Barrie
London
Hamilton
Kitchner
Minneapolis
Quebec City
Jacksonville
Orlando
New Orleans
Tampa
Miami
Not all Canadian POPs and
metro networks illustrated
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Network Footprint
• In Canada, 360 acquired the largest independent local access
provider with fiber connectivity to 2,200 on-net buildings
– Additional connectivity through unbundled network elements through
incumbent
• Strategic interconnection agreements with U.S. based metro
access providers
• Ongoing effort to increase metro access partnerships
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Waves
Transport
GigE Private Line
DS3 Private Line
DS1 Aggregation in US
10/100 Aggregation in US (late 2003, cross border focus)
• Acquiring additional assets to augment existing network footprint
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Product Differentiators
Robust North American
Footprint
 Large footprint (Canada and
US)
 Strategic Interconnection
Agreements
Performance Leader
 Proven Performance
 Will back our performance with:
1. Rigid SLA
(Availability/Provisioning)
2. Reporting on SLAs
Technology Leader
 Mesh Topology – Cost effective
protected service offering for
data services customers
 Intelligent Optical Switching
 10/100 Ethernet with Local
Access in Canada
 Optical Virtual Private Network
(“Pay as You Grow” – Requires
Channelized Interface)
 GigE Private Line (“Pay as You
Grow” – with GigE Interface)
3. Refund / Credits Provided if
SLAs Not Met
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Research & Education Partners
• Major research networks currently supported
• Unique partnership arrangements and pricing strategies provided to
research & education community
• Experience collaborating with research & education
– Allows us to see first hand new innovations in networking application that
will emerge in future commercial and carrier sectors
– Positions us with business owners / leaders of the future
– Brings significant network traffic to our platforms
• Current major research customers include
– CANARIE
– GTaNet
– Universities and School Boards
• Working toward partnership with NLR
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CANARIE Partnership
•Lead provider of Ca NET 4 (red)
•Current effort focused 10G wave augments (green)
•CANARIE Atlantic Provider
•Member of CANARIE Review Board
Edmonton
Saskatoon
Vancouver
Calgary
Kamloops
Winnipeg
Regina
Halifax
Thunder Bay
Campbellton
Victoria
Sudbury
Seattle
Quebec City
Montreal
Ottawa
Minneapolis
Toronto
Windsor
St. John's
Charlottetown
Fredericton
Halifax
Albany
London Buffalo
Boston
Chicago
New York
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Research & Education
 GTaNet
 Greater Toronto Area
 Universities and University Hospital Interconnection via Dark Fiber Solution
 Universities & School Boards
– Networking and Internet access to institutions as part of
Schoolnet / Grassroots, etc:
York Regional
Edmonton Public
Calgary Catholic
Avalon East School Board Ontario Educational
Education Network of
Communication Authority Ontario (ENO)
University of Alberta
University of Calgary
University of Manitoba
Memorial University
University of Winnipeg
University of Lethbridge
Lethbridge College
Northern Alberta Institute
of Technology
McGill University
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Product Summary
North American Carrier Service Offering
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Infrastructure Services (Collocation, Dark Fiber, Conduit)
Wavelength Services
Transport OCn
GigE Private Line
DS3 Private Line
DS1 Private Line
Services Supported using
High Capacity
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High Capacity Longhaul DWDM
Intelligent OEO Switching Platform
DWDM
Wavelength
Services
Transport
Services
Intelligent
OEO
Switch
Canada - Additional Commercial Service
Focused on Medium and Large Enterprise
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10/100 Ethernet WITH Local Access
Voice (Local, LD and PRI)
LAN / WAN Services
Internet Access
IP Transit
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Infrastructure
• Dark Fiber and Conduit for sale, lease, or IRU grant, dependent upon
capacity and underlying rights
• Long Haul and Metro Dark Fiber
– LH Fiber available for sale: 725,000 fiber-mi
– Metro available for sale
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US: 28,000 fiber-mi
Canada: 68,000+ fiber-mi
Option to include space & power in shelters and POP sites where available
– Comes with operations & maintenance service (O&M)
• Long Haul and Metro Conduit - conduits of various types & sizes
– Comes with operations & maintenance service (O&M)
• 360 can build or purchase dark fiber from our demarcation points to
customer locations where cost justified
• Space & Power / Collocation Space
– Telco Collocation: -48V DC power environment
– Server Collocation: AC UPS power, typical raised floor environment
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Wave & Private Line Services
• Wavelength Services provides high capacity point-to-point
unprotected bandwidth between two locations on 360networks’
North American backbone
– 2.5 and 10 gigabit per second bandwidths
– Fully transparent
• Private Line services provides point-to-point bandwidth solutions
– DS1, DS3, OCN Private Line in North America
– Metro Access Solutions in Canada
• DS1, DS3 and OCN Services (OC-3 to OC-48)
– Metro Access Solutions in US
• On ramp to Intercity Network Only
– North American Intercity Solutions
• Flexible Protection Options
– 1+0 (Unprotected), Mesh Protected, and 1+1 Protected
• Quickly provisioned, flexible, upgradeable
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“Pay as You Grow” – OVPN (SONET Based)
• The ability to purchase increments of bandwidth at STS1 granularity
(50Mb/s chunks)
• The ability to quickly upgrade bandwidth when needed – software
provisioning after initial port and STS1’s established – up to the full
speed of the port purchased
– 15 Business day target for initial provisioning interval – If we miss customer
gets one month free service (for POPs with existing SN3000s)
– 3 Business day provisioning for STS1 provisioning interval – Target is
provisioning in hours instead of days
• The ability to configure protection options (1+1, Mesh or
unprotected) at the STS1 circuit level
• No premium charges above standard point-to-point OCN service
pricing
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Gigabit Ethernet Service
• Gigabit Ethernet customer interfaces
• Pay as you grow dedicated bandwidth in 50 Mb/s chunks (SONET
STS1s)
• Features
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Each STS1 can be unprotected, mesh protected or unprotected
Supports existing GigE interfaces
50Mb/s to a full GigE
Transparent delivery - customer owns flow Control & rate Shaping
Provisioning and availability SLAs aligned with Transport & OVPN
• Benefits
– Significantly lower cost router interfaces
– Ability to scale bandwidth up in 50Mb/s increments as customer traffic
requirements grow.
– No need for any level of in-house SONET expertise.
– QOS Simplified
• No statistical muxing or frame switching is performed.
• Customer Ethernet frames are directly mapped into their dedicated SONET pipe
through the network.
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360networks’ Service Commitment
• Service Delivery Commitment
– To meet our committed delivery date (or first month is free)
– Targeted delivery within 15 business days on all on-net services in
inventory
• Service Availability Commitment
– To provide protected services at 99.999% (any circuit length) and
unprotected services at 99.9% (circuits less than 750 miles) for all onnet circuits
– To measure availability in monthly intervals
– To provide credits if availability falls below SLA commitment
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