Pirelli & C.

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Broadband Access

The global broadband market is still growing despite the fact that the economic slowdown has reduced the growth rate of new ADSL connections in the mature markets, offset by rapid growth of ADSL connections in emerging markets and by the effect of upgrading to VDSL2 offers in advanced markets projected towards next-generation ultra-fast broadband.

In the IPTV market there was also confirmation of a growth trend at the global level only partially affected by the unfavourable economic situation.

During 2009 the product portfolio continued to develop both in terms of acquisition of new markets and customers and in terms of range, expressed in the main “CPE” lines made up of Residential Access Gateways, developed also with a view to fixed-mobile convergence, and Set-top Boxes for IPTV, and of ancillary products represented by Small Business Access Gateways and Extenders (devices for IPTV distribution in the home).

In 2009, finally, a healthy growth trend was confirmed also for the PMP (Pirelli Management Platform), a software system for the remote management of CPE.

In the high-range Residential Access Gateways line the Company strengthened its positioning in IAD platforms for new generation networks (NGNs), being selected by Telekom Austria for the supply of the new VDSL2 Home Gateways line, in the wake of the reputation established with acquisition of a similar order from the Swiss operator Swisscom.

While the medium-high range IAD ADSL2+ line is still the core product in terms of continuity of volumes with the two main customers (Telecom Italia and Fastweb), medium-low range lines with WiFi ADSL2+ Routers contributed to an expansion of the position with customers such as Wind (Italy), Tele2 (Italy), Telecom Argentina, BTC, Telecom Serbia, Portugal Telecom and Tellcom (Turkey).

In 2009 there was also structured expansion of solutions for mobile connectivity, which culminated in the finalization of a new range of 3G internet keys and of the “Ministation” product for Vodafone Italia.

For the Set-top Box (STB) line the business development operation continued successfully in the Ericsson environment for IPTV, which led to the selection of the new Pirelli product for the Hellenic Telecommunication Organization (OTE) SA service in Greece.

The developments of the new “hybrid” product platforms were also launched and are destined to be completed in 2010. They consist of an IP function associated with a terrestrial digital or satellite decoder, and have the aim of new positioning in the broadcasters market, with potential use also in Over-The-Top (OTT) solutions. These are products that can be positioned in an agnostic manner on telecommunication networks.

In the Small Business Gateway line, technical qualification of the IAD ADSL2+ product was completed at the laboratories of our main potential customers, and culminated with a contract to supply BT Italia, where it is supplied with a data back-up function using a mobile key.

The Extenders line, with the HCNA product, which enables the distribution of high-quality video over domestic coaxial cable, made possible the first commercial appointment of the Company, with a series of tests in collaboration with the Telefonica Group in Brazil.

In line with the strategic objective of growth of the share of value generated by software products and services, in 2009 the software portfolio area underwent further development and saw the launch of the project for the Pirelli software stack. This represents a significant investment planned for completion in 2010 with the aim of creating a Pirelli proprietary software platform.