TELECOM ITALIA GROUP

Next Generation Network Meeting with European Autorities

17-04-2007

1

TELECOM ITALIA GROUP

Index What is a Next Generation Network and Why the NGN strategies are emerging ? Key technologies What’s happening in other European countries? Services: first wave for Consumer, Business and Wholesale markets Network and service providers: bitstreaming Operating Plan and economics Approach to digital divide and impact on Italian economy

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TELECOM ITALIA GROUP

NGN2 Reference architecture: flexible, powerful, easy to manage

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TELECOM ITALIA GROUP

Service Platforms PERSONAL COMMUNICATION PLATFORM

One architecture for many business models

Video over IP

VoIP

Messaging

IMS

HSS

Directory

MSG

ICT SERVICES PLATFORM Web & Collaboration

eHealth

Educational Services

NET COMPUTING/SOA

Localizzaz.

Directory

IM/SMS/..

Service enabler MULTIMEDIA PLATFORM WEB

IPTV

DVB-H

CONTENT ENGINE/DRM

MUSIC

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VIDEO

GAMES

Full Full integration integration of of communication communication and and messaging messaging platforms platforms Replacement Replacement of of traditional traditional switches and consolidation, switches and consolidation, full full compatibility with current services, compatibility with current services, new new rich rich multimedia multimedia communications communications services services Net-computing Net-computing services, services, with with resources resources virtualization, virtualization, SOA-based SOA-based platform platform to to allow allow dedecoupling coupling and and reuse reuse Vertical Vertical solutions solutions for for infoinfomobility, education, tele-medicine, mobility, education, tele-medicine, tourism tourism

High-quality High-quality broadcast broadcast and and VOD VOD platform platform New New features: features: Interactivity Interactivity and and personal participation personal participation Advanced Advanced advertising: advertising: aa new new way way to make money to make money integration integration with with communication/ICT communication/ICT platforms platforms 4

TELECOM ITALIA GROUP

Why NGN2 for Telecom Italia • Obsolescence • increasing opex and capex with traditional copper infrastructure • traditional TDM switches renewal and their consolidation • Simplicity Technological Issues

• network unification under one key technology: IP • convergence of packet - circuit/ fixed – mobile • From telco model to ICT model • keeping up with the key demand: bandwidth increase and quality • services platforms convergence on the same architecture for different business models • New core business opportunities with multimedia communication: telepresence, tele-surveillance

Market opportunities

• Contiguous businesses opportunity: • Triple play offering for consumer market • ICT services for business segments

Next Next Generation Generation Network Network “All “All IP” IP”

• Brand new market opportunities: Telemedicine; Infomobility; enviromental sensors ...

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TELECOM ITALIA GROUP

What NGN2 means: key elements Ultra-broadband network infrastructure

Multi-channel access

“All IP”

Multimedia

IT technologies

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• Fixed access capability: up to 100 Mbit/s • Mobile Access capability: up to 10 Mbit/s • Very high Computing and storage capabilities on the Net • Easy access to communications, content and info services through different devices: PCs, TVs and fixed and mobile handsets • Extension to sensors for machine-to-machine network-based services (RFID, Traffic sensors, ...): logistics, transportation efficiency , health care, ... • Simplification: integrated transport of voice, Internet, content over one IP network • Service bandwidth guarantee • Service quality guarantee • Multimedia content distribution, broadcast capability, interactivity: broadcast TV, Video On Demand (VoD), gaming, T-Browsing, ...

• SOA - Service Oriented Architecture - model to simplify service development and reuse • Open Source software also in business business services • Resources virtualization to exploit network economies of scope

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TELECOM ITALIA GROUP

Key technologies for NGN2: Telecom Italia choice VDSL2 technology: from ADSLx a technology leap for copper performance Copper replacement with fiber optical network on NGN2 areas. Copper only in the very final segment to avoid customer impact GPON/GBE technologies over optical access network to reduce operating costs and guarantee easy bandwidth upgrade Easy network termination, NT2, to deliver end-to-end multi-quality streaming Optical Metro network:  Simplified network infrastructure intelligence aggregation  additional powerful interconnection boundary for OLOs and Service providers Radio over Fiber for Mobile access to enable 4G wireless broadband

A shared European technology and architectural framework can develop significant economies of scope and help technology innovation mainstream in Europe. See GSM success story. 17-04-2007

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TELECOM ITALIA GROUP

Some highlights: VDSL2 Standardization is key: VDSL2 implementation compliant with G.993.2 - 2005 ITU-T Standard with adoption of two different profiles: 12a, 17a (FTTCab) e 17a, 30a (FTTB). Ethernet-based packet transport: IEEE 802.3ah, Ethernet in the First Mile. Advanced testing and performance monitoring capabilities to reduce maintenance costs and improve service quality

17a

30a Downstream

30a

17a

12a Upstream

Upstream

12a

17a FTTB/Curb performances 17-04-2007

Downstream

17a FTTCab performances 8

TELECOM ITALIA GROUP

Some highlights: GPON  Gigabit PON technology for FTTB/Curb architecture  GPON technology implements a dynamic access algorithm (DBA) to optimize available upstream bandwidth.  Implemented advanced QoS functionalities for traffic management.  Downstream traffic can be multicast – one broadcast video channel to serve many users and unicast (one2one connection for a specific ONU).

SGU/SL TX xWDM nxGbE OLT GPON

Splitter ottico

multicast

1:2

1 fo

GPON 2,5Gbit/s 1 fo

1:16

Splitter ottico 1:16

1 fo

1 fo

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ONU-1 ONU-2

1 fo

ONU-n-1 Unicast

ONU-3

ONU B ONU B

Flusso ricevuto da tutti gli ONU

1 fo

ONU-n

ONU-4

ONU B ONU B

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TELECOM ITALIA GROUP

Some highlights: Optical Packet Metro network OPM network is key to deliver quality, flexibility, scalability to NGN2 with: L2/L3 traffic mapping flexibility (unicast/multicast IPTV) Enhanced QoS capabilities: e.g. CoS/VLAN classification & marking DiffServ queueing Ingress Policing and Admission Control SLA monitoring and reporting capabilities (e.g. at UNI SP-NP level) Higher Scalability (e.g. number of VLAN) and fan-out Enhanced security level (e.g DDoS Guard) Support of “pseudowires” capabilities for mobile service providers

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TELECOM ITALIA GROUP

Some highlights: NT2  NT2 device is the Network provider device installed at customer premises that guarantees Service providers end-to-end quality for connectivity.  Customer installation using current telephone plugs  Small, wall-mounted form factor,  power with external power supply,  VDSL2 WAN interface, VTU-R functions,  Bridging of LAN-WAN Ethernet traffic, VLAN management;  L2 QoS management for upstream traffic;  Remote management for provisioning, assurance performance/SLA monitoring -, firmware upgrade.

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-

troubleshooting,

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TELECOM ITALIA GROUP

Access architectures: FTTx based Central Office Primary network (200-3000m)

FTTH

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VDSL2 12M 25-50 M  2-10 M

VDSL2 ONU

FTTB

FTTE

Fiber to the Exchange

FTTCab: Fiber To The Cabinet FTTB:

Fiber To The Building

FTTH:

Fiber To The Home

ADSL2+ 3-20 Mbps  90% Standard BB (>10 Mbps) > 70% Premium BB (>25 Mbps) > 40%

Z

2006-2009 VDSL2 investments: 800 m€: street cabinet, fiber, transmission, fully equipped nodes, without VDSL2 line cards

Z

T

Chosen Technologies: ADSL2+, VDSL2 and FTTH/B

FTTH initiatives Z

Asturias project Started on June 2006 GPON based architecture FTTH connection of 30,000 households by the end of 2008.

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TELECOM ITALIA GROUP

NGN2 Consumer service architecture VoIP High Quality VDC

HDTV - IPTV Web TV

Broadband Broadband Fixed Fixed Access Access •Giga-mail, •Giga-mail, Storage, Storage, •Instant •Instant Messaging, Messaging, •My •My Web Web Site Site •Home Network •Home Network

Enhanced Enhanced Customer Customer Support Support •Help •Help Desk, Desk, SLA SLA •Device •Device Management Management •Installation •Installation and and configuration configuration

Home Office (teleworking) Home Care Home Security

Broadband Broadband Mobile Mobile Access Access •HSDPA •HSDPA •Instant •Instant Messaging Messaging mobile mobile •My Web Site ( .mobi) •My Web Site ( .mobi)

FTTB / VDSL connectivity ( “enhanced upstream channel”)

• Services • • • Profiles 17-04-2007

Dual Dual Play: Play: Voice Voice and and Broadband, Broadband, Voice Voice and and TV TV Triple Triple Play: Play: Voice, Voice, Broadband Broadband and and TV TV

• • Basic Basic (up (up to to 20 20 Mbit/s) Mbit/s) • • High High End End (up (up to to 50 50 Mbit/s) Mbit/s) 19

TELECOM ITALIA GROUP

NGN2 Business service architecture VoIP

CRM

Home Office (teleworking)

High Quality VDC

ERP

Video surveillance

Telepresence

NewGen NewGen “ASP” “ASP” Services Services

•Tera-mail, •Tera-mail, Storage Storage •Istant •Istant Messaging Messaging •Web+Intranet+Collaboration •Web+Intranet+Collaboration

Net Computing

Builiding/Office Automation

Enhanced Enhanced Customer Customer Support Support •Help •Help Desk, Desk, SLA SLA •Device •Device Management Management •Installation •Installation and and configuration configuration •Security Management •Security Management

Mobile Mobile Office Office

•HSDPA •HSDPA •Instant •Instant Messaging Messaging mobile mobile •Web Site ( .mobi) •Web Site ( .mobi)

FTTB / VDLS2 Connectivity (“symmetrical channels”)

Services • Communication: IP PBX, IP Centrex, Call center • Communication: IP PBX, IP Centrex, Call center • • Broadband Broadband Internet Internet Office: Office: VPN VPN Extranet Extranet & & LAN LAN • • ICT: ICT: Managed Managed Services, Services, Web Web Applications, Applications, Logistic Logistic • • Universal Universal f-m f-m corporate corporate access access 17-04-2007

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TELECOM ITALIA GROUP

ICT offering for vertical markets New New Business-to-consumer Business-to-consumer digital digital platform platform for: for: promotions, promotions, caring, caring, valuevalueadded added services,… services,… Multimedia Multimedia

Traffic Traffic info, info, fleet fleet management, management, smart smart city city access, access, parking parking management,… management,…

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Turism Turism Environment Environment Energy Energy Net Net Centric Centric Enabling Enabling Platform Platform Intelligent Intelligent Transportation Transportation Systems Systems Productivity Productivity Corporate Corporate Finance Finance SME SME

Virtual Virtual Presence Presence

e-Health e-Health

Tele-working, Tele-working, cooperative cooperative working, working, Distant Distant learning learning

Patient Patient info, info, pharma pharma management, management, medical medical parameters parameters tele-check, tele-check, specialist specialist remote remote visit, visit, .... ....

Net Net Centric Centric Infrastructures Infrastructures and and Application Application Services, Services, shared shared service service centers, centers, ... ... 21

NGN2 Wholesale Interconnection Points Infrastructure services

IT - PLATFORM

Bitstream services

Broadband Area

CRM

DATA WAREHOUSE

BILLING

ERP

SERVICE DELIVERY

SERVICE ASSURANCE

TRAFFIC & USAGE

NETWORK MANAGEMENT

CUSTOMER DATA BASE

WORK FORCE MANAGEMENT

NETWORK NEUTRAL EM

NETWORK DATA BASE

PERSONAL COMMUNICATION PLATFORM P2P VOIP

IP-DSLAM (4.000)

VIDEO OVER IP

MSG

IMS ADSL2+ ( ˜10Mbit/s)

//

//

//

// HSS BBAN - CN

Sub Loop Unbundling and ULL

OPTICAL PACKET BACKBONE

DIRECTORY

MSG

MULTIMEDIA PLATFORM C2P WEB

IPTV

DVB-H

RAN - CN

CONTENT ENGINE/DRM STORAGE

OPTICAL PACKET METRO

//

MUSIC MULTISERVICE EDGE NODE (POP)

FTTC VDSL2 ( 50Mbit/s )

OLO IP BACKBONE

IP- VDSL DSLAM (ONU)

Vertical internal loop

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GAMES

ICT SERVICES PLATFORM B2B+C

FTTB ( 100Mbit/s )

Ultra Broad band Area

VIDEO

MANAGED SERVICES

Bitstream Parent e Distant

APPLICATIONS

SOA UTILITY COMPUTING

STORAGE ON DEMAND

Optical fiber network

MESSAGING COLLABORATION

MESSAGE STORE

DISASTER RECOVERY

Services Center)

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TELECOM ITALIA GROUP

Wholesale offering: relationship among different Providers in the NGN2 scenario

Service Platforms of Telecom Italia

Equal Access TELECOM ITALIA Network Provider Infrastructure

Service interconnection between TI’s and SPs’ services

Service Provider without transport network IP Wholesale Broadband Access

Layer 3 (IP Network)

Service Provider with IP transport network

Ethernet Wholesale Broadband Access

Layer 2 (Metro Ethernet Network)

Service Provider with IP backbone & metro Ethernet transport network

Infrastructure services

Access Network Network Termination Home Network

End Customer Domain

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Set-top box

CPE

CPE

End Customers reached by means of infrastructure services 23

TELECOM ITALIA GROUP

The models applicable to IP interconnection Services over IP in the retail market

Session based services Communications services (e.g. voice, videocomm.,...)

Content based services Video on demand, IPTV, mobile TV...

IP Service Oriented Interconnection (SoIx) The IP interconnection is aware of the type of service and is able to guarantee a pre-defined level of interoperability, also by controlling each single session

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Data stream services Internet browsing, data transfer, leased lines...

IP Connectivity Oriented Interconnection (CoIx) The IP interconnection is irrespective of the type of service flowing on the data connectivity, established between the domains of two network providers

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TELECOM ITALIA GROUP

IP Service Oriented Interconnection - SoIx Session Border Controllers Service Providers 1

Signaling End Users

Transport

Service Providers 2

IP/Signaling Protocols IP/Media

Signaling

End Users

Transport

 For both the service providers, IP interconnection must be as valuable as the retail services  It’s then essential that SoIx shall be a “carrier-grade” service; this means that network and service security should be guaranteed; quality parameters should be adequate to expected end-to-end SLAs; accounting per type of service needs for billing integrity; technologic solutions should be scalable and reliable 17-04-2007

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TELECOM ITALIA GROUP

NGN wholesale broadband connect Multi-quality Wholesale ultra-Broadband Connect is a wholesale VDSL2 access service provided on new fully-IP/Ethernet transport network Multi-quality Wholesale ultra-Broadband Connect includes: network performances capable to satisfy requirements coming from any kind of service, provided over any kind of access architecture (FTTB, FTTCab or FTTE); different Class of Quality (CoQ) characterized by different values of performance parameters, in order to suit requirements from various applications (voice, video, business data, internet....) . Network Provider Domain (includes NT2)

Service Provider

Network NetworkProvider Provider Transport TransportNetwork Network Connectivity streams with different Quality

17-04-2007

VDSL NT2 IP DSLAM in FTTx config.

End Customer

Home Networking

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TELECOM ITALIA GROUP

Development of Infrastructure services in NGN2 context

Copper line rent by TI to OLO Optical fiber rent by TI to OLO

   

Electronic Distribution Frame

Housing

VDSL ONU

Backhaul services

OLO’s cabinet near to the one of TI

New TI’s cabinet on the street VDSL ONU

Local Access Exchange

End-User

Sub-loop unbundling

Sub-loop unbundling at the new Telecom Italia’s street cabinets Arrangement of the cabinet for connecting one or more OLOs’ cabinets, placed in the proximity to the one of Telecom Italia Selling/Renting optical fibers from the Local Exchanges up to the street OLOs’ cabinets (depending on the availability of network resources) Backhauling capabilities for connecting the Local Exchange with OLO’s POP

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NGN2 FTTCab/FTTB FTTE broad band

NGN2 and BB fixed coverage

64% of fixed access

NGN2 operating plan Fixed terminations (Milions)

9,5

11,3

13,0

7,3

7,5

0,04

2007

0,5

2008

1,2

2009

2,1

2010

3,6

2011

5,5

2012

2013

2014

2015

2016 2.210

8.190

1.766

Central offices

1.296 482 7

22

2007

2008

41

112

2009

2010

842

249

2011

2012

2013

2014

2015

2016 7.960

Cities/ Municipalities

826

977

1.140

562 207

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1

2

6

20

81

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2016

28

NGN2: cabinets and buildings coverage NGN2 operating plan Cabinet in FTTCab (thousands)

Covered Cabinet areas

65,7

73,5

52,0 38,8 24,0

FTTB (thousands)

0,0

2,2

4,1

5,4

2007

2008

2009

2010

12,8

2011

2012

2013

2014

2015

2016

16,5

Covered Cabinet Areas

12,0 8,7

0,1

0,9

2007

2008

2,2

3,7

4,2

2009

2010

2011

4,7

2012

5,3

2013

2014

3

2007

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2008

2016 268

Reached Building

22

2015

55

2009

93

2010

114

135

164

2011

2012

2013

195

2014

226

2015

2016

29

New mobile access areas macro and micro locations Macro cells (thousands)

15,5

15,3

15,5

15,5

15,5

3,0

2,4

1,4

0,4

12,3

13,1

14,1

15,1

14,6

2008

2009

2010

2011

2012

0,8

15,2

Solo GSM

15,0

14,7

14,7

2,9

4,0

5,0

13,2

12,0

10,7

9,7

2013

2014

2015

2016

2,0

UMTS e UMTS/GSM LTE/UMTS

25,7

Microcells (thousands)

Microcelle UMTS

21,7

2008

7,0

8,4

7,0

8,4

2009

2010

9,8 9,8

2011

11,7 11,7

2012

13,7

17,7 4,0

8,0

Microcelle LTE

12,0

13,7

13,7

13,7

13,7

2013

2014

2015

2016 100%

Outdoor Population coverage (%)

75%

UMTS 2000 UMTS 900 LTE

50%

25%

0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

UMTS/LTE Scenario with ROF microcellular solution 17-04-2007

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Telecom Italia Fttx deployment: impact on capex • The challenge for Telcos is to invest in NGN technology without increasing in capex/year and reaching important benefits in term of opex savings; • The key strategy for achieving this goal is to look for technical solution able to reduce as much as possible the capex per customer and to accelerate the process of replacement of the existing network; • A great portion of Capex for new network’s deployment is in substitution of traditional and inertial investments and the development of new Ultra Broadband services will make significant benefits in terms of customer retention and revenues.

Fttx Traditional +Fttx Capex

Inertial Capex for Network+IT

2007

2008

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2009

2010

2011

2012

2007

2008

2009

2010

Traditional

2011

2012

31

Target benefits: Opex reduction • Network simplification (lower number of networks and elimination of traditional TDM networks) and Fttx implementation in the access network will generate significant savings for lower costs of maintenance and power consumption; • Lower costs of provisioning and assurance, thanks to the possibility of remote management of new cabinets without technicians operation (“zero touch”); • Strong reduction of location’s rental, due to a reduced number of local exchanges; • A reduction of hospitality's lease for mobile antennas, gradually replaced by Radio over Fiber solutions (RoF), more and more distributed and with reduced space occupation.

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Broadband divide • Different “Broadband Divide” generations: – First generation Broadband (BD1): • Peak downstream speed ≥ 500 Kbps (10x dial-up), < 5 Mbps • Reference technology: ADSL – Second generation Broadband (BD2): “Broadband • Peak downstream speed ≥ 5Mbps (100x dial-up), < a 25 Mbps Divide” • Reference technology: ADSL2+ – Third generation Broadband (BD3): • Peak downstream speed ≥ 25 Mbps (500x dial-up) • Reference technology: VDSL2 “Ultra- Broadband – Fourth generation Broadband (BD4): Divide” • Peak downstream speed ≥ 50 Mbps (1000x dial-up) • Simmetric connectivity • Reference technology: FTTH/FTTB • Different innovation waves allow gradual services delivery with non-homogeneous deployment in terms of access and adoption. Issues: – Different Adoption curves during the time, – Saturation levels may prevent commercial diffusion, – Customer switch to new technology difficult to forecast,

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NGN2 plan for digital divide: Broadband inclusion plan

•

Total NGN2 coverage is the sum of VDSL2 and ADSL2+ coverage. NGN2 plan starts with 45% coverage due to ADSL2+ IP deployment pre-NGN2. NGN2 plan will upgrade most of current ADSL2+ central offices in metropolitan areas to FTTB/FTTCab technologies

95%

100% 86%

% connections

•

98%

98%

98,5% 98,5%

99%

99%

89%

80%

92%

90%

95%

99%

100%

100%

98%

100%

100%

80% 80% 65% 67%

60%

55%

59% 45%

51% 40%

45% 35% 27%

20%

17% 10%

0%

10% 5% 0,2% 2% 0% 0% 0% 2004 2005 2006 2007 2008 2009 2010 ADSL

2011

ADSL2+ (IP)

2012

2013

2014

2015

2016

VDSL2

•

Broadband inclusion plan will cover the remaining areas with FTTE/ADSL2+ IP technology achieving no first and second generation broadband divide: BD1=BD2=0.

•

Forecasted final Broadband Divide at 2016: BD3=35% e BD4= 1 – 0,65*0,25 = 84%.

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NGN2: a strategic asset for Italian economy Some benefits

• •

• •

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European Healthcare sector could reach 18%22% of GNP by 2020

350 300 250 200 150

58% del totale 9% del totale

100 65 50

3% del totale

10

49

2,8

7

31% del totale 61

2,9

Malati cronici, disabili

Anziani in disagio,non cronici Cure

Disagiati e emarginati

Altri soggetti

Care

A structural discontinuity is needed. ICT can help to reduce structural costs , especially in caring.

400 350

64% del totale

300 250 MLD €

•

Italian Healthcare system – Significant structural cost reduction (see sheets) – Hcare Services improvement especially caring and remote monitoring – Better access to top medicare specialists and expensive medical instruments Pubblic Sector Administration – e-Governement: easy access to PA services, better relationship with citizens Enterprises – Productivity improvement and net-based globalisation effects Education – Differentiated and long-life e-Learning. – Elderly quality of life improvement, – professional re-skilling – Better access to top level education Entertainment and Culture – National culture exploitation, multimedia content production Tourism – Exploitation of National cultural heritage and of beautiful natural locations

MLD €

•

236 200

24% del totale

150

Fonte: OECD data

9% del totale

100 50

126

102

35 15

0 Malati cronici, disabili

3% del totale

Anziani in disagio, non cronici Cure

6

11

Disagiati e emarginati Care

Altri soggetti

35

Thank you

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