Technology and infrastructure of Numericable Group 6.7.1 Conditional access system
Access to the television channels offered in the Numericable Group program packages is secured by means of a conditional access system that Numericable Group obtains from Nagra France, a subsidiary of Kudelski Group. The conditional access system enables Numericable Group to offer pay-TV services, to control access to certain paid offers and to individually bill each subscriber for these services. The system encrypts the signals sent to subscribers and subscribers decrypt the signals using a set-top box and an access card. See Section 6.10 “Dependency” of this Registration Document for a description of the contract with Nagra France. At the time of signing of a Numericable Group services contract, subscribers receive a set-top box and an access card that enables them to receive the paid programming offered by Numericable Group. Each card is electronically synchronized with a single set-top box. Numericable Group regularly checks and identifies any unauthorized access to its service because all unauthorized access entails major risks for its business and revenues. See Section
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IRUs (Indefeasible right of use) are contracts assigning operators permanent, irrevocable and exclusive rights of long-term use. Applied to the local fiber optic loop, it enables an operator to have a right of use over a local loop deployed by another operator by making an initial payment. It is therefore a form of joint investment. The right to sell remains with the owner of the local loop.
4.2.12 “Data loss, data theft, unauthorized access and piracy can have a material adverse effect on the Group’s business and reputation of the Group, as well as on its accountability, including criminal liability” of this Registration Document.
In compliance with the agreements signed by Numericable Group with Kudelski Group, Numericable Group has system solution licenses and software it needs to provide some of its services, specifically for the broadcast of digital television, security systems, interactive applications, VOD platforms and the programming of digital television. In the event of an irreparable failure of the Numericable Group systems, Nagra France, pursuant to the contract with Kudelski Group is obliged, under certain conditions, to replace the conditional access system and the cards supplied to Numericable Group subscribers and, if necessary, adjust the set-top boxes to the new system.
6.7.2 Set-top boxes and Internet routers
In order to receive digital television services, Numericable Group subscribers unscramble the digital signals using the Group’s interactive HD set-top boxes with an access card (also referred to as a “smart card”) to decrypt the signals. Since 2009, Numericable Group has purchased most of its set-top boxes from Sagemcom under procurement contracts. In October 2011, Numericable Group signed a procurement contract with Sagemcom for the Group’s new set-top box, LaBox. The initial duration of the contract was until April 2016, but it will then renew automatically, unless terminated early. It sets out a commitment by Sagemcom to deliver the set-top boxes ordered within fixed terms and a non- exclusive commitment by Numericable Group to order minimum quantities of set-top boxes during the course of the contract.
The Group has chosen to use a single supplier, believing this to be most effective given the complexity of this equipment. However, the Group believes that it could procure set-top boxes from other suppliers without running into any particular issues or extra costs. Although the Numericable Group set-top boxes are designed by its manufacturers, Numericable Group was very much involved in the design of the operating system and particularly as regards the interface that appears on its customers’ screens when they use the set-top boxes. With LaBox, the portal, the user interface and the backbone system use a software based on HTML5, created and owned by Numericable Group. Numericable Group believes that it is the first operator to use a software based on HTML5 in a set-top box and that this has enabled it to finalize a top-of-the-range product more quickly than would have been possible using the technologies normally involved.
In order to access the Internet and fixed-line telephone services of Numericable Group, Numericable Group subscribers must have a high-speed router. The range of high speed broadband services offered by Numericable Group includes services with download speeds of up to 200 Mbps. Since 2007 and until recently, the high-speed routers supplied by the Group to its subscribers were all pre-EuroDocsis 3.0 broadband routers (or “Docsis broadband”), which offered download speeds of up to 100 Mbps. The Group now supplies high-speed EuroDocsis 3.0 routers with the capacity to support download speeds of up to 800 Mbps, although it only supplies its B2C subscribers with speeds of up to 200 Mbps. Numericable Group generally purchases its gateways from Netgear, after verifying their compatibility with its systems and adapting them if necessary.
As of December 31, 2014, approximately 59% of the gateways deployed by Numericable Group used EuroDocsis 3.0 (deployments since 2010), 32% used EuroDocsis 2.0B (deployments between 2007 and 2010) and 9% used EuroDocsis 2.0 (deployments pre-2007).
6.7.3 Information technology (“IT”) systems
The Numericable Group IT systems were mainly developed by its own in-house IT department. Numericable Group develops solutions in-house because it is important to maintain a high level of flexibility and capacity to adapt to the changing market conditions. The main Numericable Group IT systems are as follows: (i) the system of sales services, which mainly allows Numericable Group to register and control the commercial operation of the direct and indirect distribution networks for the
two segments, B2C and B2B; (ii) the CRM system, which enables Numericable Group to offer customers a complete service in terms of complaints, subscriber profile analysis and the processing of special offers and the recovery processes; (iii) the reporting system that enables the rapid preparation of reports on the business’ key indicators, the automatic distribution of reports to the designated addressees and the preparation of reports and analyses according to area of business; and (iv) the system for managing subscribers that facilitates the authorization of new customers, processes monthly subscription payments, controls payment delays, notifies the failed accounts by means of messages spread through “pop-up” windows, SMS messages, automated telephone messages and e- mails, provides for automatic changes, enables the de-registration of customers upon expiry of their contract and enables the automatic distribution of these services.
6.7.4 Data centers
In order to meet the needs of the B2B segment, Numericable Group has three data centers in Paris, Rouen and Lyon. These data centers consist of one or more properties equipped with 24-hour security and surveillance services and include several rooms with cabinets containing the servers, kept at an ideal temperature and permanent electricity supplies. The servers hold the data and applications to be used by B2B customers, who benefit from a secured connection to the data center servers.
Technology and infrastructure of SFR Group 6.7.5 General presentation
Simplified general architecture of a telecommunications network
(Source: SFR Group, diagram prepared internally)
CUSTOMER
S
ACCESS
NETWORKS
COLLECTION
NETWORKS
BACKBONE
INTERCONNECTIONS
SERVICE
PLATEFORMS
The rate of major technological advances in the telecommunications sector is intense and is becoming increasingly faster specifically to be able to keep up with the very rapid development of Internet use, both in fixed-line and mobile. Consequently, for some years now, SFR Group has embarked on a path of streamlining its networks, built historically by SFR for mobile and by Neuf Cegetel for fixed-line.
Simplified diagram of SFR Group network
(Source: SFR Group, diagram prepared internally)
Traffic is collected by means of access networks dedicated to customer connections and thereafter routed via the collection networks to the backbone.
The laying of services is supplied by different platforms adapted to the services (voice or data) and each of the markets covered by SFR Group: B2C, B2B and Wholesale.
6.7.6 Access networks
6.7.6.1 Mobile access networks
As explained in Section 6.6.5 “Overview of the SFR Group network,” the SFR Group mobile access network comprises more than 18,800 radio access sites, each consisting of:
one or more items of emission/reception equipment (base station), each dedicated to a single technology (2G or 3G) or latest generation equipment “Single-RAN,” which enables 2G, 3G and 4G technology to be managed by means of a single item of equipment;
transmission equipment connecting the radio access equipment to the collection network and the backbone via optical fiber, radio connections (FH) or links leased to Orange; and
environmental infrastructures such as the energy workshops, antennas, technical room and pylon holding the antennas, etc.
6.7.6.2 Fixed-line access network
Historically, the unbundling of copper connection links of subscribers of Orange has enabled SFR Group to act as an Internet access provider.
SFR Group fixed-line access network can route voice or data traffic from the terminal equipment at the customer’s premises to the collection points.
Since 1987, SFR Group has also been deploying its connection links of subscribers by means of optical fibers (FttH), using GPON technology.
Access type on the fixed-line network
(Source: SFR Group, diagram prepared internally) 6.7.6.2.1 DSL (Digital Subscriber Line)
The “MDF” (Main Distribution Frame) is a building owned by Orange in which all copper telephone links terminate for a given geographic area. The size of the MDFs varies considerably from a few hundred to several dozen thousand lines. SFR Group has installed DSLAM (Digital Subscriber Line Access Multiplexer) type equipment in these MDFs, which enables the connection of customers mainly through ADSL2+ technology.
SFR Group ensures the supply of Internet access on the copper link (DSL - Digital Subscriber Line) in two ways:
by means of the installation of active equipment named “DSLAM” (Digital Subscriber Line Access Multiplexer) in the Orange MDF premises, on which the connection links are then connected for SFR Group subscribers (this solution is referred to as “unbundling”);
by means of the purchase of a wholesale service from Orange, which then delivers the traffic of all customers concerned to the collection points (this is referred to as a “bitstream” solution).
6.7.6.2.2 FttH
In order to connect homes to fiber optics, SFR Group has chosen to deploy GPON technology, which enables multiplexing of 64 or 128 homes on a single fiber. This technology means that theoretical speeds of up to 1 Gbps in download can be offered to subscribers, as well as the benefit of an entirely passive distribution network between the ODF (Optical Distribution Frame) and the customer’s installation, which reduces costs of deployment and operation.
In very densely populated areas, SFR Group builds its own ODF and deploys its own optical fibers through to the shared access points (typically situated at the base of each building). The connection of a customer up to the shared access point is carried out by the building operator, who manages only the infrastructures deployed within the building.
Outside densely populated areas, the part of the shared optical network is greater. Shared access points are defined for each geographic area and each serves approximately 1,000 homes with a shared infrastructure.
In the two cases described below, optical couplers/splitters situated at the shared access points enable customer flows to be multiplexed on a single optical fiber.
General diagram of an FttH connection
(Source: SFR Group, diagram prepared internally)
6.7.6.2.3 Wimax (Worldwide Interoperability for Microwave Access)
Société du Haut Débit - SHD (“SHD”), a 100% subsidiary of SFR Group, holds an operating license to use the frequencies of the 3.5 GHz bandwidth in the regions of Ile-de-France and Provence-Alpes- Côte d’Azur, for Wimax technology. These frequencies will be used in the future with the technological neutrality12 of the frequencies and services initiated by the European Commission. 6.7.7 Collection networks
The collection of fixed-line traffic, corresponding to the network elements situated between the customer-side access and the backbone, is assured through optical fiber, leased connections and the FH. The collection network enables the aggregation and routing of flows between fixed-line or mobile access network and the backbone supporting the services. Flows are transported in IP via the Ethernet protocol.
The SFR Group collection network is based on 160 metropolitan loops constructed in the centers of the cities.
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Principle according to which the frequency bandwidths are available for all types of technologies and all types of electronic communication services.
6.7.8 Transmission network and IP transport network
For its optical transmission network, SFR Group has chosen a “meshed” architecture, namely one that is constructed in the form of inter-linked loops, thereby securing traffic flow as much as possible. In the past, SFR Group built its optical transmission network on the basis of national agreements with Réseau Ferré de France (RFF) and Voies Navigables de France (VNF). SFR Group has extended this vast transmission network by also renting fibers to third parties (Réseau de Transport d’Electricité (RTE), motorway networks, metropolitan networks) and to Orange, specifically for the connection of MDFs.
To be able to handle increasing traffic, SFR Group has implemented the highest performing optical technology available to date, and more specifically, the use of speeds of 100 Gbps on the main routes.
Transmission network map
(Source: SFR Group)
SFR Group has constructed an IP (Internet Protocol) transport network that is multi-service and boasts very high capacity. It is situated above the optical transmission network. The backbone routers use Nx100G technology (i.e., they can support connections of a unitary capacity of 100 Gbps).
The SFR Group network can manage Internet access services using the addresses in the format IPv4 or IPv6 for its B2C, B2B and Wholesale customers. It can transport voice, data and video flows (television services on multicast IP or Video On Demand: VOD).
6.7.9 Service networks: backbone and service platforms
The networks supporting voice or data services schematically consist of several service platforms that are different for each service and are inter-connected. For a given service, the platforms and network equipment enabling the interconnection form a backbone.
6.7.9.1 Mobile voice backbone
The mobile voice backbone can handle voice traffic and interconnections towards other operators. Since 2009, voice has been supported in 2G and 3G via the IP protocol, on a latest generation R4 network architecture. The platforms supporting the short message services (SMS) and multimedia
message services (MMS) are sized to absorb exceptional traffic peaks as seen, for example, during End-of-Year celebrations. SFR Group has also implemented a virtualized infrastructure (IAAS (“Infrastructure as a service”), adapted to the telecommunications world), enabling it to rapidly launch innovative new services.
6.7.9.2 Mobile data backbone
The data transmission backbone for mobile is currently being modernized to be able to handle the traffic of all customers using 2G, 3G and 4G technologies. It is installed in three different sites and has a size and mechanisms that are such as to ensure availability of service, including where major damages are suffered at one of the three sites. This data transmission backbone handles the WAP (Wireless Application Protocol), MMS, consumer and business Internet access, the parental control service and mobile television and video on demand services.
6.7.9.3 Fixed-line voice backbone
SFR Group has a voice backbone on IP for its fixed-line service customers that has been provided since 2011 by two IMS (IP Multimedia Subsystem) technology platforms, in order to cope with the growth in traffic. The IMS platform is still used today, particularly for B2C telephone services, but also for B2B, and to manage call continuity between fixed-line and mobile handsets.
The mobile voice network described above in Section 6.7.9.1 “Mobile voice backbone” of this Registration Document is currently being evolved to be completed by an IMS backbone that will allow for the direct transport on the 4G network of voice (today transported on 2G and 3G networks). This will bring about a considerable improvement in quality of voice calls and will decrease call establishment time by a factor of five. Accordingly, in the medium term, IMS technology will allow for a convergence of voice network infrastructures of fixed-line and mobile services, as shown in the diagram below.
(Source: SFR Group, diagram prepared internally)
SFR Group has also embarked on an IP technology modernization plan of its voice interconnections with other operators.
6.7.9.4 Fixed-line contents distributor service
In addition to the various large capacity items of equipment present on the networks to process the data flows, SFR Group has also implemented a contents distribution service, or Content Delivery
Network (CDN), based on twelve regional sites and consequently reducing data traffic on its national transport network. This CDN specifically hosts the Video On Demand services and the website sfr.fr, and is also open to third-party services.