Tiscali 2007 Annual Report Download - page 19

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18
Broadband: 2007, focus on organic growth
Wholesale
model: OLOs resell broadband access provided by the former incumbents. In this market,
operators are unable to exploit the competitive advantage of owning proprietary networks - which squeezes
margins - and they also have no control over the product offered to the end-user.
Bit-stream
model: the interconnection to the network of the national telecoms operators is charged at
cost. Bit-stream allows alternative operators such as Tiscali to use their own networks, which means they
only have to pay the national carrier for access to the local loop and backhauling services (transmission
of traffic to the interconnection point).
Unbundling
model: OLOs can access the local loop by investing in local networks. Unbundled services
allow operators to expand their margins to over 70% and to control the quality of the service provided to
final customers.
IMPATTO POSITIVO SU ARPU E PROFITABILITÀ
19%
25%
56%
ULL
Bit-stream
Wholesale
70%
30%Gross Margin
% of ADSL revenues YE 2006
GROSS MARGIN IMPROVEMENTULL: A SUSTAINABLE STRATEGY
46%
26%
28%
ULL
Bit-stream
Wholesale
70%
30%Gross Margin
% of ADSL revenues YE 2007
As of 31 December 2007, Tiscali had reached:
3486 co-locations in Italy,
reaching a 50% market coverage
3800 co-locations in the UK,
with a 55% market coverage
TISCALI GROUP