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MSOs expand business horizons

FT’s convergence strategy and practice

Bharti Airtel catching the broadband wave

Unlocking the secrets of SoftBank’s 3G success

Synergies boost mobile broadband

Sponsor: Huawei COMMUNICATE Editorial Board,Huawei Technologies Co., Ltd.

Consultants: Hu Houkun, Xu Zhijun, Xu WenweiDing Yun, Yu Xiangping, Liu Dongfang

Editor-in-Chief: Gao Xianrui (sally@huawei.com)

Editors: Xue Hua, Liu Zhonglin, Li Xuefeng, Huang Zhuojian Xu Ping, Fan Ruijuan, Chen Yuhong, Yao Haifei Pan Tao, Xu Peng, Zhu Wenli, Long Ji, Wang HongjunZhou Shumin, Mike Bossick, Gary Maidment

Contributors: Zhu Yonggang, Yang Guodao, Han BaiZeng Cheng, Jiang Wenhua, Xu Yiqin, Li Xiaoke Wang Haiqing, Zhang Shichuan, Zhou JingLi Gang, Sun Hui, Huang Bin, Liu Nanjie, Feng LiXu Shaomin, Chai Jiayong, Fan Lifeng, Xiao JiwenZhang Feilong, Ge Yulin, Lin Peixing, Li Rong

E-mail: HWtech@huawei.com

Tel: +86 755 28356172, 28356173

Fax: +86 755 28356180

Address: A10, Huawei Industrial Base, Bantian, Longgang, Shenzhen 518129, China

Publication registration No.: Yue B No.10148

Copyright © Huawei Technologies Co., Ltd. 2009. All rights reserved.No part of this document may be reproduced or transmitted in any form or by any means without prior written consent of Huawei Technologies Co., Ltd.

NO WARRANTYThe contents of this document are for information purpose only, and provided “as is”. Except as required by applicable laws, no warranties of any kind, either express or implied, including but not limited to, the implied warranties of merchantability and fitness for a particular purpose, are made in relation to contents of this document. To the maximum extent permitted by applicable law, in no case shall Huawei Technologies Co., Ltd be liable for any special, incidental, indirect, or consequential damages, or lost profits, business, revenue, data, goodwill or anticipated savings arising out of or in connection with any use of this document.

“The change from atoms to bits is irrevocable and unstoppable,” observed MIT Professor Nicholas Negroponte years ago in his famed 1995 book Being Digital. Displaying a panorama of life in the digital age, it has since inspired people enormously, giving wings to their imagination. Today, being digital is no longer about the future, but a reality. Mobile broadband, in its move from inception to ubiquity, has filtered into our lives in a subtle, unsurprising yet profound manner, changing the way we communicate, live and work, and even the way we see the world. Indeed, the mobile broadband network and mobile Internet have developed to a point where information is available and accessible anywhere and anytime. Digitization, no longer the ink-on-pulp, is here and is now.

Yet the flipside of the coin is not quite as shiny, at least not for the moment. While mobile broadband is infinitely promising, its rapid uptake also presents many challenges. The increasing popularity of data cards, intelligent terminals and video services, for example, invariably give rise to a huge tide of data traffic. While dramatically boosting subscriber numbers, mobile broadband fails to bring up revenues correspondingly. To combat these challenges, we must look at the issue from a number of angles.

First, it is obvious that the traditional mobile network architecture cannot support the long-term development of mobile broadband, hence questions that invariably follow. What strategies shall operators adopt to construct a mobile broadband architecture with robust access and bearer capability to cope with data traffic spikes? How shall they strike a balance between market development pace and network capacity? And how shall they diagnose the network regularly using effective network evaluation tools and make sure that efforts are well coordinated in network building, business expansion and market development? As technically speaking LTE is widely recognized as the evolving direction for the mobile broadband network, the coexistence of LTE and other technologies is inevitable. How to effectively address the issue of interference between different network technologies is one more question that operators have to ask and answer.

Second, it is high time that operators practiced lean management and improved business performance to become profitable in mobile broadband. Actually, this is what operators are working toward. Given the cutthroat competition, price war is a ready resort, which always turns out to be pyrrhic, though. So, how shall operators make the tradeoff between user experience, network capacity and tariffs, and how shall they determine their bottom lines and design a sound tariff structure to stay away from this trap of price war?

We have to confront all these questions head on before unleashing the full potential of mobile broadband and make it profitable. Fully committed to the belief “Utmost for Our Customers”, we at Huawei stand right by your side to help you win out in the race.

Decoding mobile broadband

Ding Yun

President of Huawei Customer Solution and Sales Support Dept.

What’s inside:

P.17 P.34

03 GP, Huawei win”Green Mobile Award”at GSMA Mobile Congress

04 Frost & Sullivan recognizes Huawei with three Best Practice Awards

Global Digest

01 Vodafone tags mobile Internet services for revenue boost

25 MSOs expand business horizonsBy Chai Jiayong & Liu Yingke

14 China Mobile Zhejiang embraces full-service operationAfter gathering solid market research and meticulously planning service, China Mobile Zhejiang has optimized its networks and O&M systems to beat the competition with innovative full-service operation.

By Hu Huangang

08 Transforming the FTTH and broadband landscape in Japan

By Yukiyasu Sakamoto

11 Bharti Airtel: catching the broadband wave

By Yao Haifei

05 The journey to convergenceFrance Telecom’s strategy and practice

By Damien Schaepelynck

Expert’s Forum

21 Brilliant life powered by Smart City

By Chen Feng & Huang Ying

Main Topic

17 National broadband is on the wayNational broadband initiatives are blooming across the globe and transforming the telecom landscape. In this context, a successful national broadband strategy requires a mature ecosystem for future development and a strong input from government.

By Chen Feng & Xu Hong

P.39P.44

Let’s COMMUNICATE beyond technology and share understandings of the latest industry trends,

successful operational cases, leading technologies and more. Based on in-depth analysis of the

matters that lie close to your heart, we will help you stay on top in the competitive telecom industry.

31 Successful 3G operation in emerging markets

By Pan Fei & Wei Mengjiang

37 Mobile broadband more than just a price war

By Bai Ju

34 Smart mobile broadband with differentiated operations

By Huang Wangshun

47 Bridging multinational operationsBy Lin Peixing & Li Rong

44 Mitigating interference between LTE and 2G/3G networks

By Sun Jingfei

Solution

27 Unlocking the secrets of SoftBank’s 3G success SoftBank Mobile conducts the fastest 2G to 3G evolution in Japan. After the acquisition on Vodafone K.K. in March 2006, the operator has sustained leading subscriber growth rates for an impressive 26 consecutive months despite a saturated market and intense competition.

By Zhou Jing

Business Mode

39 Synergies boost mobile broadbandBy Zhang Ping & He Zhichao

Network Strategy

42 Building cost effective mobile broadband networksMobile broadband services have seen increased traffic but the revenues have lagged behind. Operators need to adopt new strategies to build low-cost, high-performance mobile broadband networks.

By Chi Zhentao

GLOBAL DIGEST

DEC 2009 . ISSUE 531

News

DOCOMO plans environmental sensor network

NTT DOCOMO wi l l t r ia l a

network of environmental sensors

to measure carbon emissions and

other atmospheric conditions.

The Japanese operator said the

sensors would be installed at its

mobile base station sites, creating

the largest of its kind in Japan.

I t w i l l b e g i n a t r i a l o n

December 21 using sensors in 300

locations within the Kanto region

surrounding Tokyo. If successful,

the network will be expanded to

2,500 locations nationwide by

March 2011 and eventually to

9,000 locations.

Vodafone tags mobile Internet services for revenue boost

As operators around Europe

continue to report stagnant or

declining voice revenues, Vodafone

has revealed it will be looking

closely at methods to capture more

revenues from mobile Internet

services. The company said that top

of the list was the development of

premium services and micro-billing

beyond what has already been

launched or announced, such as

Vodafone 360.

Vodafone Europe CEO, Michel

Combes, believes that additional

revenues are needed to continue

investment in the data networks,

but without simply becoming high-

speed dumb pipes that would

continue to benefit the main

winners in the mobile Internet

space, such as Google and other

big search engines.

Zain expands One networkOver 27 million Zain customers in

Bahrain, Iraq, Jordan, Kuwait, Saudi

Arabia and Sudan will benefit from

One Network services–effectively

being treated as local customers–

when visiting Egypt, while Mobinil’s

24 million customers will benefit

from similar treatment when visiting

any of these Zain countries.

The One p la t fo rm a l lows

subscribers to make calls, send

SMS and access the data services

at local rates of the visited country

and to receive incoming calls from

their home country at free or

minimal charge.

AT&T launches prepaid mobile broadband offerings

AT&T Mobility launched its own

prepaid mobile broadband plans,

weeks after rival Verizon Wireless

decided to jump into the prepaid

broadband market.

T h e n e w p l a n s , c a l l e d

DataConnect Pass, work with

all AT&T-certified netbooks and

laptops. The pricing is identical to

the plans that Verizon introduced

earlier. AT&T is offering a daily

plan for 15USD with a cap at

75MB of usage, a weekly plan

for 30USD with a cap at 250MB,

and a monthly plan for 50USD

with a 500MB cap. AT&T said that

users will receive a text and email

message once either 30 minutes or

20% of their allotted data usage

remains in a session.

Quarter of broadband grant applications WiMAX-based

Of the 1130 app l icat ions

submitted to the US federa l

government for last-mile broadband

stimulus funds, more than a quarter

were filed by WiMAX operators

looking to capitalize on the program

to expand wireless access and mobile

broadband services to underserved

areas, according to an analysis by the

WiMAX Forum. While many of those

applications were for rural projects,

several of them came from familiar

names looking to expand access in

the big cities.

T h o u g h t h e n u m b e r o f

applications from wireless providers

was large, the amounts each

requested on average was relatively

small. Of the 14.212 billion USD

in last-mile funds requested, the

300 WiMAX applications totaled

1.6 billion billion, according to

the Forum. The NTIA and the US

Department of Agriculture’s RUS

fund have set aside a total of 4

billion USD in grant funds with an

additional 3.2 billion USD available

for loans. In total the government

has received appl icat ions for

28 billion USD in funding for all

broadband stimulus projects.

Forum President and Chairman

Ron Resnick said that the high

turnout among wireless providers

shows that WiMAX has enormous

potential in bridging the digital divide

between competitive urban markets

and unserved and underserved rural

markets.

Orange to integrate Twitter into mobile service

In a pan-European move, but

launching first in the UK, Orange

will integrate Twitter features into

its mobile service, allowing users the

ability to upload and share photos

with their Twitter followers via MMS.

SMS-based tweets will be rolled into

the standard mobile plan and users

will be able to set times for receiving

tweets, chose a maximum number

of daily tweets and chose to receive

updates in real time, hourly or daily.

KPN opens for German network sharingKPN may consider network

sharing with Telefonica O2 Germany

to share costs and wants to talk

with Telefonica about a joint bid for

German digital dividend spectrum,

which will be auctioned in the first

quarter of 2010, according to KPN

CEO Ad Scheepbouwer talking at

Morgan Stanley's TMT conference.

Asked about the possibility of

merging the two businesses,

Scheepbouwer said both companies

would only sell if they got a high

price.

DEC 2009 . ISSUE 53 2

Data

87 millionLTE deployments will pick up

over the next few years and lead to

87 million LTE subscribers by 2014,

according to GSMA. However, GSMA

also thinks that HSPA technology will

have a long shelf life and will keep on

growing even as more operators begin

adopting LTE.

4 millionNew research predicts that WiMAX

chipset shipments will hit 4 million by

the end of 2009. Currently, there are

14 WiMAX chipset manufacturers

targeting the market.

Adlane Fellah, Maravedis CEO

said, “With only 14 WiMAX chipset

manufacturers this will put some

pressure on manufacturers with

insufficient customer traction, lacking

funding or scale, or offering only partial

chipset solutions.”

1stHuawei has been assessed as

1st Tier in the global mobile market

in Q209 by Current Analysis.

"Positive" in its Perspective and

Vision, and "Very Positive" in

Momentum, which means Huawei

wireless market has been generally

recognized as Tier 1 by the industry.

42.5 millionMobile broadband connections

will exceed fixed-line broadband

connections in 2011, according

to a report to be released by

mobileSQUARED. By 2011 the

number of active 3G devices in the

UK will be 36.3 million, as well as 6.4

million dongles/embedded devices,

taking the total number of mobile

broadband connections to 42.7

million versus expected broadband

Internet users of 42.5 million.

No. 2Huawei grabs the No. 2 position

in the global mobile infrastructure

equipment market in the third

quarter, according to research firm

Dell'Oro. According to Dell'Oro,

Huawei's market share nearly

doubled to 20 percent, up from 11

percent in the year-ago quarter.

1 billionFigures from Informa Telecoms

& Media show that data revenues in

Africa increased 13% in the second

quarter of 2009 to reach over 1 billion.

A good example of this is

Safaricom’s m-pesa initiative in

Kenya, which analysts agree has

shown the way in mobile banking,

as a revenue generator as well as a

customer retention tool.

Telus extends IPTV network in Alberta and B.C.

Telus Corp. is extending the

reach of its IPTV service in Western

Canada, making the broadband-

based television offering available in

Lethbridge and Medicine Hat, Alberta

and Campbell River, British Columbia.

Telus TV is being marketed as

an alternative to cable services.

It offers hundreds of channels,

including almost three dozen in HD,

as well as Video On Demand and

DVR services.

Vodafone creates SMS symphony for marketing campaign

The New Zealand division of

international cell phone giant,

Vodafone , has l aunched an

innovative new marketing campaign

involving a symphony created

entirely with SMS ringtones.

The project involved 1,000

mobile phones and 2,000 text

messages sent in a precise sequence

to duplicate Tchaikovsky’s 1812

Overture.

53 distinct ringtones were used

to create the Vodafone commercial,

which was uploaded to YouTube

and has already been viewed more

than 200,000 times.

New EU laws aim to cut prices, guarantee net freedomThe European Parliament has

approved a raft of new telecom

laws designed to give European

consumers cheaper telecom services,

more privacy and faster Internet

access.

The laws broadly attempt to

equalize telecom services across

Europe, with dominant operators

forced to compete fairly with smaller

rivals or face having their networks

separated from their service divisions.

“The EU te lecoms re form

will bring more competition on

Europe's telecoms markets and

put citizens in the center stage in

telecoms regulation," said telecoms

commissioner Viviane Reding.

Finland awards 2.6GHz licenses for LTE

Finland has awarded licenses

in the 2.6GHz band for offering

LTE mobile services. Finnish mobile

operator Elisa said it was allocated

50MHz during the auction, which

was run by the regulator Ficora and

ended on 23 November.

The license is valid until 2029 and

comes with a fee of 834,700EUR,

the company announced. Sonera

also acquired a 20-year license for

five blocks of 2x5MHz in the 2.6GHz

band, for 819,000EUR.

The company expects to connect

its first customers over the LTE

network in the first quarter of 2010,

while network roll-out will depend

on customer demand and the

availability of compatible end-user

equipment.

Global Digest

DEC 2009 . ISSUE 533

Huawei News

Vodafone and Huawei open Core Network Innovation Centre in Italy

Shenzhen, China, 25 Nov, 2009

Vodafone and Huawei have opened

a laboratory in Milan, Italy to drive

core network innovation and to

benefit customers.

The Core Network Innovation

Centre (CIC) in Milan is equipped

with the latest Huawei mobile

and core network equipment and

technologies to boost innovation in

core network solutions. Huawei and

Vodafone's collaborative research

will aim to give both companies a

competitive edge in core network

areas, such as mobile broadband, IP

Multimedia Sub-system (IMS) and

Fixed Mobile Convergence (FMC),

eventually bringing new ideas to

fruition, enabling timely market

launches.

The CIC represents Huawei's

primary investment in core network

technologies in Europe, with the

project underscoring the company's

close collaboration with the operator

community.

Livio Borgogno, Director of

Vodafone's global core network

competence centre, and Cai Liqun,

President of Huawei's core network

product line, inaugurated the CIC in

Milan.

"The CIC wi l l ensure that

Vodafone is able to maintain its

position as an innovation leader

within the core network, so that our

customers will continue to benefit

from the latest technology to improve

and enhance their communications,"

said Livio Borgogno of Vodafone.

Huawei receives Light Reading’s 2009 Top Picks Award for its transport and router products

Huawei's OSN8800 NG-WDM

platform and NE40E universal service

router were recognized as Light

Reading's 2009 Top Picks in Carrier

Transport category and Switching and

Routing category respectively.

"Congratulations to all the

companies and individuals who were

selected as this year's Top Picks,"

says Phil Harvey, Light Reading's

Editor-in-Chief. "The Top Picks were

chosen by Light Reading's editors

because they embody the trends

that we feel are really pushing this

industry forward."

The OSN8800 NG-WDM platform

records a cross-connect capacity

of 2.56T, and is able to upgrade to

6.4T. With the capability to support

40G and 100G transmission and full-

service operation, including Virtual

Container (VC-x), Optical Data Unit

(ODUk), lamda, future-oriented

packet services and cross-connection,

this platform enables operators

to achieve greater flexibility and

optimized wavelength utilization.

Huawei's NetEngine40E X -Series

(NE40E-X3/X8/X16) universal service

router (USR) is fully compatible with

all existing NE40E router linecards and

the coming 100G linecards, resulting

in best investment protection. By

integrating SR, BRAS, video cache,

DPI on the same platform, the NE40E

X-series USR allows intelligence-on-

demand, thus providing more services

with better quality and shorter time-

to-market, and significantly reducing

CAPEX and OPEX.

Grameenphone, Huawei win “Green Mobile Award” at GSMA Mobile Congress

Grameenphone Ltd., jointly with

Huawei, has won the "Green Mobile

Award" at the GSMA Mobile Awards

2009. The award was announced

during the GSMA Mobile Congress

2009, held in Hong Kong 18 and 19

November 2009.

The "Green Mobile Award"

was developed to promote the

"going green" initiatives and for

organizations in the mobile industry,

as well as organizations outside of

the industry that utilize the mobile

platform to communicate, innovate

or drive eco-friendly programs,

services and initiatives.

The winning entry by Huawei

and Grameenphone resulted from

their partnership in 2008, called

"Building a Greener Mobile Network,"

to transform a legacy mobile core

network in Bangladesh into an

environmentally friendly network.

Mr. Frode Stoldal , CTO of

Grameenphone, and Mr. Tony Zhang,

President of Huawei Bangladesh,

jointly accepted the award on

behalf of their respective companies.

Also joining Grameenphone at

the ceremony was Mr. Jon Fredrik

Baksaas, President & CEO of Telenor

AS, representing Grameenphone's

largest shareholder Telenor Group.

"We are honored to be recognized

for our contribution to environmental

protection and the sustainable

development of local societies," said

Tony Zhang, President of Huawei

Bangladesh. "Huawei will continue to

pursue and deliver cutting-edge, cost-

lowering green solutions for all of our

operator customers in Bangladesh

and around the world."

Commenting on the award,

the Grameenphone CTO said that

"Grameenphone is very committed

towards the ‘Green‘ revolution in

everything it has been doing over

the last few years. This award is

only indicative of the role that

a mobile company can play in

the development of low carbon

economies, industries and lifestyles."

Grameenphone's environmental

roadmap aimed to promote a low-

carbon society, and GP's first priority

was to take responsibility for the

excess of CO2 emissions generated

by its own operations. It was under

that initiative that GP signed power

purchase and system procurement

agreements for renewable energy

with Huawei.

Huawei is dedicated to the

cont inuous deve lopment o f

cons t an t l y enhanced g reen

solutions for energy efficient and

environmentally friendly networks

around the globe. These innovative

solutions aim to help operators

optimize energy efficiency, maximize

their return on investment, fulfill their

social responsibilities, significantly

reduce the TCO in the product

life cycle, and enhance market

competitiveness. To date, Huawei's

green solutions have been adopted

by leading telecom operators around

the world, including GP, Vodafone,

Warid, and China Mobile.

DEC 2009 . ISSUE 53 4

Huawei deploys world’s first TD-LTE trial network for 2010 Shanghai World Expo

Beijing, China, 13 Nov, 2009,

Huawei announced the deployment

of world's first TD-LTE/SAE trial

network for China Mobile. This new

network with an actual download

speed of up to 29Mbps will be used

for 2010 Shanghai World Expo.

Wang Jianzhou, Chairman and

Chief Executive Officer of China

Mobile, said, "This state-of-the-art

network covers the whole site of

2010 Shanghai World Expo, which

will fully demonstrate the capability

of TD-LTE technology."

As the only vendor able to

provide end-to-end TD-LTE/SAE

solutions, Huawei deployed the TD-

LTE radio access network and SAE

core network for China Mobile, and

delivered chipsets and terminals.

These infrastructures and terminal

devices enabling high definition

(HD) video transmission, HD video

monitoring, HD video-on-demand

(VOD) and mobile Internet will

support the live broadcasting and

security for the coming events.

"TD-LTE/SAE technologies with

the advantage of low latency and

high spectrum efficiency are getting

increasingly more recognition from

operators and telecom organizations,"

said Li Changzhu, Vice President of

China Marketing, Huawei, "As most

of the significant technical innovations

will be showcased during the Expo,

this TD-LTE/SAE trial network is one of

the most exciting innovations during

the event. This network adopted

Huawei's integrated LTE solution of

FDD and TDD technologies, as well

as the SAE core network which is

being used in world-leading operators'

network modernization."

Huawei shares vision of All-IP mobile broadband evolution at Asia Pacific CTO Forum 2009

Hong Kong, China, 17 Nov, 2009,

Huawei discussed its views on the

future of mobile broadband at the

third annual Huawei Asia Pacific CTO

Forum in Hong Kong. More than 150

senior executives representing over

60 telecom operators from around

the region participated and engaged

in collaborative discussion on how to

address pressing industry challenges,

with a focus on the evolution of

mobile broadband.

Huawei led this discussion,

p r o v i d i n g n e w i n s i g h t s o n

i t s f o reca s t s fo r t he fu tu re

development of mobile broadband,

as well as working with operators

to determine how they can best

leverage the rapid growth of

this sector. Huawei predicts that

by 2013, the number of mobile

broadband subscribers will exceed

2 bill ion, including 1.6 bill ion

new subscribers, representing

growth of more than 80 percent.

However, according to Informa

Telecoms & Media, global mobile

data network traffic will grow

by 1,587 percent between 2008

and 2013, wh i le revenue in

this space will grow by only 83

percent over the same period. To

offset this imbalance, operators

will need to adopt evolutionary

technological solutions to decrease

their cost per megabit and ensure

a smooth transition to a next-

generation network. Towards this

end, Huawei identified increasing

network efficiency and moving

to a converged network as the

key drivers and differentiators

for operator success in mobile

broadband.

Frost & Sullivan recognizes Huawei with three Best Practice Awards

Shenzhen, China, 18 Nov, 2009,

Huawei received three Frost & Sullivan

Best Practice Awards, including 2009

Digital City Solution Innovation of the

Year, 2009 Unified Communications

Solution Innovation of the Year, and

2009 Multimedia Contact Center

Solution of the Year at Frost &

Sullivan Enterprise Communication

Summit and Award Ceremony 2009

in Shanghai, China.

Revenues for the worldwide unified

communications markets reached

670.0 million USD in Q2 of 2009. It

is forecasted that the market size of

worldwide unified communications

will exceed 700 million USD by the

end of 2009 along with 340 million

USD as revenues of worldwide

communications hardware market.

Given the still nascent nature of the

unified communications applications

market, we expect to see solid growth

rates for several years to come.

2009 Digita l City Solut ion

Innovation of the Year is introduced

to China for the first time to honor

the excellent solutions in the

interest of city informationization.

"Huawei eCity Digital City Solution

has occupied a leading position

in the industry on the basis of its

advanced technical framework, open

system, innovative business, in-depth

comprehension and practice," said

Dr. Neil Wang, Frost & Sullivan China

General Manager.

Huawei eCity Digital City Solution

as the integration of Internet

technology, the Internet of things

technology, and telecom network

technology could construct unified

digital city management system.

Huawei unified communication

solution which supports the future-

oriented IMS network framework,

has rich product series that include

IP phone, IP-PBX, integrated Assess

Gateway, Unified Message Server to

help users build IP Telephony System.

According to different requirements,

users could choose Huawei's different

solutions to build customized system

and create more values. In the

contact center market, Huawei IP

contact center solution provides the

contact center platform and rich

services such as customer service,

marketing promotion, information

directory service, and recharging.

Regardless of user's limited Total Cost

of Ownership, Huawei IP contact

center solution could assist users

by improving customer satisfaction

and loyalty. Hence, Frost & Sullivan

recognizes Huawei Software with

2009 Unified Communications

Solution Innovation of the Year, 2009

Multimedia Contact Center Solution

of the Year. In-depth interviews,

analysis, and extensive secondary

research are done to identify best

practices in the industry.

Expert’s Forum

DEC 2009 . ISSUE 53

The journey to convergence

The journey to convergence

France Telecom’s strategy and practice

France Telecom (FT) began its convergence journey in 2005 with the aim of delivering new telecom experiences through NExT. In 2009, the success of NExT and FT’s business transformation are evident and impressive. Damien Schaepelynck, the Director of Marketing & Service Development at Orange Labs Beijing, describes NExT, the convergence experience, and Unik, an example of FT’s FMC service.

5

By Damien Schaepelynck from FT

DEC 2009 . ISSUE 53

Huawei Communicate

Mr. Damien Schaepelynck is Director of Marketing & Service Development, Orange Labs Beijing. With degrees in mechanical engineering, electronics, and informatics, Mr. Schaepelynck has 15 years experience in the telecom industry.

A world presence

p e r a t i n g u n d e r t h e w e l l -established commercial brand of Orange, France Telecom is one of the world’s major telecom

enterprises. Its 2008 revenues reached €53.5 billion and, notably, half of this was generated outside of France, compared with just 3% in 1996.

France Telecom currently serves 182 million customers, more than two-thirds of whom are under the Orange brand. France Telecom’s market activities are strongly balanced among countries in Europe, Africa, and the Middle East and cover 121 million mobile customers in 30 countries, ranking us as the third largest operator in Europe. France Telecom has the most customers in Europe for fixed lines, ADSL and VoIP. In the corporate market, our Orange Business Service provides services for two-thirds of the world’s leading multinationals across 220 countries and regions.

NExT move

The world of telecommunications is changing. Powered by ever intensifying compet i t ion and the technologica l capability to carry all types of content across one network, industry and enterprise boundaries along the IT and telecom value chain are beginning to blur. Innovation in terms of products and services has accelerated, and global companies such as Google and Skype can provide telecom type of services without owning networks. This new world has forced the incumbents to rethink their way of doing business.

What’s NExT?In 2005 France Telecom implemented

the new NExT strategy which aims at offering subscribers a new experience in telecom services. We realized that the new business climate meant more than just providing our customers with network access; we needed to give them ubiquitous services that offered the same experience regard le s s o f loca t ion or t e rmina l . Customers don’t think about networks or technology; they simply want a decent end experience from a given service. Of course, the service must be convenient and easy to use. This inevitably requires more complex technology, which needs to be hidden from the customer.

Why convergence?Is the market ready for convergent

services? Orange’s market study conducted in 2006 tells us yes it is. First, we’re seeing increased customer demand for multiple service packages. In Europe the penetration rate of the four services in the same household–fixed phone, broadband, pay TV and mobile–climbed from 16% in 2006 to 35% in 2008, although access during this period involved more than one service provider. In 2008, 63% of European households received mobile and broadband services; of these, 66% expressed a preference for bundled services and between 10% and 15% said they’d consider opting out their existing contract for mobile and broadband bundle. So, there is a clear market demand for bundled services and this approach is an effective way for operators to attract customers, not just retain them.

It’s a l so important to know what customers expect from bundled services.

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The first thing is simplicity; 42% of the households receiving mobile and broadband services state they want a single bill, customer service, loyalty program, and portal. The second key feature is value. Offering a convergent service in a pure bundle is equivalent to a 20% price discount. Bundled services are therefore a great way for customers to receive better and simpler services at a lower price.

Implementing convergence

S o , h o w c a n w e i m p l e m e n t convergence? By focusing on content, networks and organization.

We decided that content should be available on PCs, TVs, and mobile phones. By offering content everywhere, we can differentiate ourselves from our access competitors and provide targeted services to maximize revenues.

We’ve not on ly t rans formed our service provision methodology, but also our business model . One way we’re achieving our targets is by capitalizing on Livebox and promoting its wider use as a central feature of our home-networking convergence strategy. Through Livebox, we provide access to fixed phones, VoIP, TV, and Wi-Fi for mobile phones. It also forms a music, radio, games, and web service system, and is therefore an excellent integrated home service platform. Naturally, we need high-quality content for L ivebox. At the moment , we’re collaborating with content providers to increase our value and aggregate content, which we deliver through our networks. We prefer to work in partnership rather than produce content ourselves–our networks and strong corporate foundation make us an attractive partner.

We’ve signed agreements with all the major TV channels and some movie channels. We also provide sport content such as French Football League matches, which is extremely popular with our customers.

Network convergence is integral to the provision of convergent services. We’re expanding our network capacities to offer ubiquitous broadband, including the expansion of ADSL, ADSL2+ and the pre-deployment of FTTH. We’ve deployed

3G and 3G+ for mobile broadband and mobile multimedia. We intend to infuse our networks with intelligence, part of which involves an adaptable and efficient information system that provides the right services at the right time and at the right quality. Growth programs account for 36% of our recent asset investments, including fiber optics, content, new usage platforms, broadband networks in mature markets, and network deployment in growing markets.

Finally, giving customers a seamless exper ience involves organiza t iona l reshuffling in order to accommodate a huge range of tasks. An important goal for us is to enhance our distribution channels. Customers expect an integrated experience at stores and online. Call centers and customer care divisions have to provide clear and consistent processes for fixed, Internet, TV, and mobile services.

Unik: a concrete exampleUnik is our FMC service and, to date,

1.6 million Orange customers now use Unik handsets. Interestingly, we’ve found that one-third of all mobile calls are made at home and over 40% are made at work. In this sense, a mobile phone is not just a mobile tool–it’s a personal phone that people prefer to landlines. Similarly we’ve been surprised to find that over a third of mobile TV is viewed at home, which contradicts our expectation that this would be a service for people on the move, when traveling, and so on. Based on this, we developed Unik.

What is Unik?

Unik is a mobile phone that works on GSM or UMTS networks outside the home. At home, it uses Wi-Fi to automatically connect to Livebox or other home gateways to provide VoIP at a flat rate with better indoor coverage.

Unlicensed mobile access (UMA) technology makes this possible by allowing GSM and GPRS mobile traffic to be carried over an IP network. UMA was introduced into the 3GPP standard as generic access network (GAN) in 2005 and simply requires customers to have a mobile subscription, a UMA-compatible phone,

and broadband access. Many phones are now compatible with UMA; last year we released Unik with the first 3G UMA service, opening a new world of multimedia services for our Unik customers.

Unik value and opportunities

Unik provides a high quality customer experience with many benefits–it’s easy to use, cost-effective, and seamlessly switches format. Unik also generates solid revenues for Orange in a way that integrates fixed and mobile charges, reduces churn levels, increases our customer base, and raises fixed ARPU.

The service also helps boost broadband subscriptions–when we launched our Net & Unik package in France as an add-on to the postpaid mobile talk plan package, over 80% of our customers also became broadband subscribers. At that time, we were focusing on attracting new broadband subscribers, and Unik met this need. When a service creates benefits for customers and value for operators, a true win-win result is achieved.

Going beyond voice

Our fu ture emphas i s w i l l be on promoting convergent services. Firstly, we will expand our VoIP service for Unik subscribers to allow access through any Livebox, for example, at a friend’s house, like we are doing on our Wi-Fi hotspots. Secondly, we’re promoting faster music, games, podcast downloads, and user generated content. The Unik can also be used as a remote control in a digital home–users can share and access music, photos and videos on any home device. Beginning with Unik, we’re exploring the wide range of possibilities that convergence can deliver.

Telecommunications is changing and in turn we need to change the way we think and do business. So far, we’ve been successfully implementing convergence strategies that have created great value for us and customers. As we expand, these must be adapted to the different markets and environments of other countries. A common thread, of course, is that operators need the strength to find their own way forward.

Editor: Long Ji longji@huawei.com

The journey to convergence

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Transforming the FTTH and broadband landscape in JapanBy Yukiyasu Sakamoto from NTT West

NTT West

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Spread of FTTx in broadband market

i r s t , l e t me introduce Japan’s broadband market as a whole. By the end of fiscal year 2008, there were approximately 15 million

FTTH customers, ranking Japan second after China (Source: Point topic Ltd). This is remarkable considering the country’s relatively small population.

When you compare the broadband access cost in Japan, it is the lowest in the wor ld a t 0 .07USD/100Kbps as compared to 0.49USD in the United States. The reason for the low access cost is mainly due to fierce competition with other broadband operators and our cost reduction efforts. It leads more customers

Such drastic shrinking of analog telephone market is caused by a growing demand for mobile and IP-based telephone services and lending subscriber lines to other carriers. But, we have to survive as a single entity. So, we decided to make a shift for FTTH broadband.

As I mentioned, even in the western part of Japan, the FTTH market accounts for almost 50% of the total broadband market. But honestly speaking, we are gradually facing difficult times. It took us just 11 months to grow the FTTH customers base from 2 mil l ion to 3 million and 10 months from 3 million to 4 million, but it took us one year to add another 1 million to 5 million. The slow customer acquisition rate is mainly due to economic situation and severe competition.

Transition of FLET’s service

We h a ve a g g r e s s i v e l y d e p l oy e d generations of FTTH services, including NGN service. We named our broadband service FLET’s, combining the letter “F” with the word “Let’s” (from our “Let’s IP Service” slogan). The “F” symbolizes key service benefits, flat rate service, friendly Internet access and a flexible environment.

Our latest FTTH over NGN service was launched in March 2008 under the new brand, FLET’s Hikari Next.

It p rov ide s th ree t ype s o f u sage –100Mbps service for residential users in detached house (“Family-type”), 100Mbps service for residential users in condo (“Mansion-type”) and 1Gbps service for enterprise users (“Business-type”). In addition to broadband access using high-speed optical fiber access line, our NGN service features guaranteed QoS,

F

Mr. Sakamoto has served as Director of the Global Business Office at NTT West since July 2009, responsible for international business development and activities of his company. In the course of dramatic growth in the Internet and broadband, Mr. Sakamoto has held a variety of managerial positions at NTT West.

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to use broadband service. Let’s take a look at our broadband

market by services. As of March 2009, the country had a 57.3% broadband penetration rate for households. If we split the penetration by service, FTTH is number one with a penetration rate of 28.4% vs. 21.2% for DSL. Over the period between March 2008 to March 2009, FTTH increased at almost 20% while DSL decreased by 8%. So it’s fair to say that FTTH is and will be the major service in Japan for broadband usage.

Focus on fiber-based broadband services

NTT West is fully owned by NTT. Our business areas encompass fixed telephones, ISDN, ADSL and FTTH. But, we are not allowed to provide Internet service or content. We have a total subscriber base of 28 million. As of March 2009, PSTN customers accounted for 18 million and FTTH customers accounted for 4.8 million. FTTH customers exceeded 5 million in May 2009. In western Japan where we operate, broadband penetration by household is 54.7%, of which 26.7% is FTTH and 19.6% is DSL. This is slightly lower than average in Japan, because Tokyo, capital city of Japan, is not NTT West’s coverage.

Shrinking of analog telephone market

Our revenue is declining, due to the shrinking analog telephone market. At NTT West, revenues from analog telephone and ISDN traffic decreased dramatically by more than 80% over the last 8 years.

Japan is home to one of the most mature and competitive broadband markets in the world. NTT West (a subsidiary of NTT) has a strong foothold as a provider of regional telecom services in western Japan. Yukiyasu Sakamoto, the Director of the Global Business Office, Technology Innovation Department at NTT West, delineates the company’s broadband strategy for service development and network deployment.

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triple-play, security functions as standard features, easy set-up and integrated terminals. We are still rolling out our NGN service. At the end of fiscal year 2010, we aim to cover all of existing fiber areas, equivalent to 90% of households.

Promotions at initial stage

When we first launched the fiber service seven or eight years ago, we encountered some obstacles from customers who regarded fiber access unnecessary as no applications needed such a wide bandwidth. In view of this, we promoted our FTTH service tactically. We started targeting narrow broadband users and introduced a flat rate plan. Our idea was to give them an opportunity to enjoy broadband.

We s e t u p a s p e c i a l s i t e c a l l e d FLET’s Square, an exclusive web site for customers who have subscribed to our broadband service. The site has contents such as cinema, music and community information and a lot of free services. This enhanced our FLET’s service and attracted subscribers.

We then sold our FTTH service to existing DSL customers with an appealing bundle of IP telephony service. You may find this interesting. But in Japan, the tariff is increased according to distance. Once our customers switch to the fiber network and subscribe to our IP telephony service, they can make calls at a very attractive price, no matter the distance.

Cultivating new markets

We are now cultivating new markets in three ways.

First, we have an alliance with Nintendo so that for non-PC users, a Nintendo game console can be connected to our network with the assistance of the special contact window and the team for set up.

Second, we pay great attention to customer service. We set up special subsidiaries for home network in 2007 that promised fast and quality installation service, not only for fiber, but also setting up links to our network with PCs or non-PC devices.

Third, is about video services over fiber optics. NTT West is working to address customer needs. Our “FLET’s TV” enables

“FLET’s Hikari” subscribers to view digital broadcasts and Video On Demand at very reasonable price.

Development of human resource is another issue for shifting from telephone company to broadband company. To change our employees’ mindset and let them acquire necessary skill for broadband service, we initiated an e-learning program called Broadband Experience Learning. In this program, employees could proactively experience and learn the broadband environment by themselves.

Moreover, we also had an in-company campaign award to increase sales staff motivation. The sale of a fiber related service is given priority in performance evaluation among regional branches.

Future aheadNTT group is striving to generate

profit from fiber-optic services (fiber-optic access plus NGN and the existing IP network) on a single-year basis with a target of fiscal year 2011. The positive outlook is based on the revenue growth by enhancing and diversifying of services through NGN commercialization based on customer needs, pursuing efficient capital investments according to demand, and spending sales-related expenses efficiently.

Trends and challenges of NGN

Let me outline the main steps in our network evolution.

We started with a fiber optics network called B Flet’s in 2001. At that time, we used BPON technology. We upgraded the network to an IPv6 network called Flet’s Hikari Premium four years later and now to the cutting-edge NGN network.

At present, the biggest issue for us both technically and strategically is migration. We offer various services on different networks which are PSTN, IPv4 and IPv6 network. To reduce cost, mainly operational cost, we plan to migrate all our services to NGN. As to a detailed execution plan, the NTT Group will make a public announcement in 2010 as to how to migrate.

In addition to migration, the green issue is also on top of our agenda. Along with rapid growth of the Internet market and

increase of IP related equipments, power consumption is increasing. We need to change this trend. So, we aimed to decrease the total amount of CO2 emissions more than 15% per subscriber until 2010 comparing with year 2000. To achieve this goal, we are focusing on power saving technology in four technical areas: home network, ICT equipment, air conditioning and power feeding. Specifically, we think that the virtualization of storage and the network is important to reduce costs and save power.

Business strategy

In the future, our main business will still be NGN. Based on NGN service, we will also expand our business scope to cover home networking, mobile content, data center, digital signage, or packaged sales to small offices, etc.

Let me give some examples. Regarding the service network interface (SNI), collaboration between the NGN and application service (SaaS)/platform services which are provided by our group companies and partners is promoted. When it comes to the user network interface (UNI), we will explore applications in various scenarios, such as tele-working, health care, home security and home entertainment. For instance, we have made arrangements with educational program service providers to provide an e-learning service.

I’d also like to introduce one of our unique mobile content services offered by NTT West group company. NTT SORMARE has the largest market share in the field of mobile comics and the most titles, including popular comics like Hokuto-no-ken. SORMARE’s strengths lie in our technical and business expertise in editing e-comics and running site operations, the largest number of Manga titles and a strong, trusted, recognized, nationwide brand.

In conclusion, NTT West will focus our business on fiber-based broadband services, exploring innovative services and upgrading our NGN network. We are confident in our ability to favorably transform the FTTH and broadband landscape in Japan.

Editor: Zhu Wenli zhuwenli@huawei.com

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Bharti Airtel: catching the broadband waveThe Indian telecom market has taken center stage thanks to strong growth in the mobile market. Yet, in the eyes of the country’s largest mobile operator, Bharti Airtel, fixed broadband is an equally promising market replete with opportunities. Mr. Shankar Halder, the Group CTO of Bharti Airtel Access Networks, describes the company’s ambitions in the fixed broadband field and the domestic challenges the company must overcome.

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By Yao Haifei

Bharti Airtel: catching the broadband wave

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Mr. Shankar Halder is the CTO of Access Network Group of Bharti Airtel Limited. He has over 26 years serving for Indian telecom industries and deep involvement in many international industry bodies ITU-T, GSMA etc. Mr. Halder received his degree in Electronics and Communication from Bengal Engineering College, Calcutta University.

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Broadband: the next wave

COMMUNICATE: Bharti Airtel is well-known to us for its dominant position in the Indian mobile arena, but this is not so for fixed. Could you first introduce your fixed network business?

Mr. Halder: The Indian fixed network market is currently dominated by the incumbent operator; out of the 37.54 million fixed lines, 88% are owned by the government operators, BSNL and MTNL. In the private sector, Bharti Airtel has the largest share, with 3 million fixed lines, out of which 1 million deliver our broadband connection. It is worth noting that Bharti Airtel ranks second only to BSNL in the fixed broadband sector. Putting this in context, we’re the second largest operator in the whole fixed network market.

COMMUNICATE: According to your observations, what are the major trends in broadband demand and usage?

Mr. Halder: One thing is very clear–there is a huge demand for broadband. B y t h e e n d o f 2 0 0 8 , b r o a d b a n d subscriptions accounted for 43% of all Internet subscriptions, up from just over 30% at the end of 2007. The number of broadband subscribers increased by 76.5% in 2008 to reach 5.5 million at the end of the year, equivalent to a penetration rate of 0.5%. So, we believe there is huge growth potential for broadband, the need for which primarily derives from high speed Internet.

More than two-thirds of users belong to computer savvy Generation Y who, at under 30, typically download movies and songs. The Internet usage has grown beyond email and chat to accommodate online games,

location applications, social networking, and P2P file sharing. As these applications become central to social and economic life, so is broadband. While cacheable traffic–the web, the Internet, and video to PC–will remain a significant part of the total Internet pipe, we know that P2P traffic is on the rise and thus forms the next target.

COMMUNICATE: We’ve also noticed that, in 2008, broadband grew by 24% in India, while fixed-line shrank by 4%. How do you see the future of voice, and what is Bharti Airtel’s strategy to balance voice and broadband development in an overall fixed network business strategy?

Mr. Halder: I believe that broadband is the next telecom wave in the same way that mobile has been in India. We’re doing relatively well with voice, and our customer base is actually growing, despite current market trends. However, the future of traditional voice is uncertain–it may or may not survive in the correct form. As we move forward, voice and broadband will be hosted by IP, with VoIP as just one of many broadband applications.

This places broadband as our main driving force. Over the past four years, we’v e m a d e c o n s i d e r a b l e g a i n s i n broadband, and our vision is to cultivate, expand, and dominate the broadband market.

Network deployment and transformation

C O M M U N I C A T E : C a n y o u introduce Bhar t i Air te l ’s current broadband service portfolio?

Mr. Halder: In India , we def ine broadband as access speed above 256Kbps.

As customers begin using it for multiple applications and become more familiar with the experience, the demand for bandwid th i s g row ing con s t an t l y. Therefore, we’re progressively migrating to 512Kbps and higher speeds.

We’re fortunate in that we’re younger than the incumbents, meaning that our opportunity to deliver high speeds based on network capability is higher. Technologically, our network is now 100% compliant with ADSL2+. In 2008, we launched 8Mbps, which is now available in 25 cities, and in 2009 we released 16Mbps in three major cities, with plans to cover four more. By the end of 2009, we intend to introduce high speed connections reaching 30Mbps using VDSL2 in selected areas.

COMMUNICATE: What are the main access technologies in your network, and what are your plans for moving forward?

Mr. Halder: Our access network is currently purely based on copper. Over the past 2 to 3 years, we realized we have to provide a high speed experience, and therefore decided to deliberately limit copper length. Fortunately, our company’s youth yielded positive results–about 75% of our copper lines are between 1 and 1.5 kilometers.

At the moment, we don’t have GPON or EPON, though we’re looking at which technology is the most suitable, how to proceed, and when to deploy. GPON seems to be more widely accepted in future over EPON, though it’s essential to view related economics in terms of CPE costs and the provision of a solid business strategy. In addition, we must plan the applications that we intend to deliver in

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NGN, and the next step will be to evolve to IMS from NGN.

We’ve chosen a holistic approach to network transformation and this embodies our requirements for a robust, scalable and cost-effective future network.

Challenges ahead

COMMUNICATE: Being a young fixed operator gives you both advantages and disadvantages. One aspect is that you must build your own copper and fiber network. What challenges will you face doing so?

Mr. Halder: Our copper resources are much less than the incumbent’s, which is exacerbated by the lack of Local Loop Unbundling in India. The main challenge in our country is obtaining the necessary right of way (ROW) permission to lay fiber and copper lines to connect to the customer. This presents two problems: the first is time–permission must be sought from a number of authorities to lay cables, which lengthens the process considerably. The second is cost–already h igh and increas ing ROW fees can account for as much as 50-60% of total access construction expenditure. The two problems are magnified if repeated digging work is required to expand and enhance the network.

Building entry doubles the ROW issue. Examples include difficulties in obtaining permission to enter high rises, as construction companies or Resident’s Welfare Association (RWA) are to be paid to give entry rights to a building. Even on successful entry, building work and wiring have to be re-done for 90% of the time because of poor quality of the existing wiring.

Low ARPU intensifies these problems. Broadband ARPU is currently 13USD to 14USD, but will drop to maybe 10USD in the near future. As a company that always prioritizes quality, we believe that an ARPU fall does not mean that we’ll offer customers a poor quality. While ARPU is coming down from the customer perspective, QoE expectations are rising, and we’re focused on maintaining high quality at all time.

The above challenges coupled with low ARPU preclude mass wireline rollout by private operators.

COMMUNICATE: We understand that , in many emerging markets , terminals can be a hurdle to broadband development. How does Bharti Airtel view this issue and how will you address it?

Mr. Halder: Obviously, there’s a lag between network development and terminal maturity. From the outset, the low PC penetration rate has formed a massive hill for broadband to climb, though we’re pleased with current progress in CPE. Nevertheless, efforts are still needed to expand the ecosystem as a whole. Airtel’s ADSL2+ is already well-established, with multiple CPE vendors available. Prices have decreased over the years and are now fairly competitive at around, for example, 20USD for an ADSL2+ modern with Wi-Fi connectivity.

Moreover, we need a re s ident i a l gateway that can connect all devices rather than a stand-alone ADSL2+ modem. This gateway can allow homes to be connected and intelligent. This is a crucial developmental opportunity that needs the concerted efforts of all for guaranteed quality, and reasonable price; we cannot grow if the CPE is too expensive. This is especially true for GPON–a 100USD+ CPE will just not work. This is the reason that we’re in actively trying to figure out with vendors how and when the economies of scale will take off.

COMMUNICATE: As we know, broadband development now mainly focuses on India’s 25 largest cities. How can Bharti Airtel promote broadband in rural areas and with which viable technologies?

Mr. Halder: We strongly believe that fixed broadband through copper or fiber will predominantly apply to urban areas based on deployment costs. Other than the incumbent’s, the copper presence in urban areas is very low. Therefore, wireless technology, particularly WiMAX/HSPA, is necessary to boost penetration in rural and suburban areas.

Editor: Gao Xianrui sally@huawei.com

advance.Eventually, copper deployment must

decrease and logic dictates that we need to accelerate fiber access deployment. We expect to trial GPON in 2010 on a limited basis, and it’s my guess that our fiber GPON deployment won’t exceed copper until 2011 or 2012.

C O M M U N I C AT E : Up g r a d i n g access technology alone is not enough to guarantee a superior customer experience. How is Bharti Airtel going to transform its network to deliver its promises?

Mr. Halder: We’re fully aware that a transformation will also take place in terms of customer focus and the new services we will deliver. With this in mind, we’re redefining our access, transport, and core networks and, for the past 2 years, we’ve worked with our partners, invested huge sums of money, and adopted a long-term approach to transform our network.

Our main focus at the access layer involves building a multi-service network that supports triple-play. We’re also keen to buy all the access nodes that support VDSL2, so that we can offer high speed by simply adding a card. Secondly, we’re aware that if we’re going to support high speed via fiber access in the future, we need a strong, carrier-grade IP infrastructure in the metros. We’ve implemented a carrier Ethernet network over the past few years for major cities, with the intention of providing ultra-high speed Internet access, triple-play, and enterprise services. Huawei partnered with us to deliver our Ethernet with full IP backbone in Mumbai, which was just launched in September. We now plan to construct a Carrier Ethernet network covering India’s seven key cities by March 2010.

Most importantly, we believe that the metro bearer network must inevitably be a converged fixed-mobile transport network that supports all kinds of access technologies, including WiMAX, HSPA, LTE, DSL or PON. This network will not only carry high speed Internet traffic, but also backhaul mobile traffic, which is especially relevant for 3G and the arrival of LTE.

At the core, we’ve shifted from TDM to

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Hu Huangang: General Manager and Senior Engineer of the Network Department of China Mobile Zhejiang. With 16-year experience in the telecom field, he previously was the General Manager of the Planning and Technology Department at China Mobile Zhejiang.

China Mobile Zhejiang embraces full-service operationAfter gathering solid market research and meticulously planning service, China Mobile Zhejiang has optimized its networks and O&M systems to beat the competition with innovative full-service operation.

By Hu Huangang, from China Mobile

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more than 60 enterprises in the province, gaining valuable network knowledge and are now promoting full-service products.

Research shows that for fixed voice services, enterprise customers first typically focus on keeping their original phone numbers and then on reducing tariffs. With broadband services, their primary concern is the broadband brand followed by cost considerations. Video conferencing, video monitoring and mobile office applications are also commonly required by these enterprises.

Our strategy for full-service operation puts the primary focus on government and enterprise customers, while taking into account the requirements for households and individuals. The convergent services have three aspects:

First, is to provide innovative services t h a t m e e t p e r s o n a l i z e d c u s t o m e r requirements, such as dual-number mobile service, convergent VPN, flexible roaming and one number link you (ONLY) service.

Second, services are bundled to meet new needs. For example, combining the corporate ring tones to the ONLY service so that employees can work while roaming.

Third, high-end services are re-designed for low-end customers.

Services are developed at two stages. At the first stage, enterprise customers using various access modes and terminals are provided with basic voice services and value-added services based on the IMS platform. This realizes convergent corporate access, enhances customer loyalty and helps to avert a price war.

Enterprise customers are provided with convergent services such as a corporate communications assistant and video telephony through the GPON. Besides meeting the basic communications needs

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of enterprise customers, the IMS also is advantageous in terms of openness, fast service rollout, and unified access.

T h e s e c o n d s t a g e i s t o p rov i d e enterpr i ses with v ideo-based high-b a n d w i d t h s e r v i c e a n d c o r p o r a t e applications like an enterprise address book to enhance ARPU. Services like standard-definition/high-definition video conferencing and mobile video monitoring are the two basic services that we focus on.

The introduction of various preferential full-service packages has definitely helped us expand customer base quickly and enterprises enhance communications.

Promoting network construction and upgrades

Full-service network construction is a complex project that involves all network aspects. IMS is the key to full-service operation. We needed to construct and upgrade relevant operation support systems and service platforms, interconnect the IMS platform and existing networks, as well as plan and deploy the GPON.

We also optimized bearer network and data networks inside the enterprises to ensure network quality and QoS.

Unified NMS and service provisioning

To simplify and ease network O&M, China Mobile Zhejiang adopts a unified core network management system (NMS), M2000, to manage IMS and the legacy mobile core network. The M2000 can also be upgraded to realize unified core network management and protect investment.

Focus on full-service operation

u l l - s e r v i c e ope r a t i on i s t h e third development wave in the telecom industry after mobile and broadband services.

The biggest advantage of implementing full-service operation for China Mobile Zhe j i ang i s to deve lop and ex tend service areas. Although dominant in the individual mobile service market, we are relatively inexperienced in construction and operation of fixed networks. The lack of last mile fixed access for government, enterprise and household customers created an urgent need to unclog the fixed network bottleneck and accelerate the convergence of fixed and mobile networks and services.

With a decided technical edge, we have innovatively blueprinted and tailored our practices for full-service operation. Based on customer requirements and fixed-mobile convergence, we are positioned to help government and enterprise customers slash communication costs, improve efficiency, while enhancing their corporate images.

In 2008, we took a critical step towards the transformation to full-service operation with the successful deployment of the first domestic IMS commercial network.

After a year’s worth of continuous input and commercial application, we forged an efficient network for IMS and GPON-based full-service differentiated operations, putting us on the cutting edge in China, the world’s most populous telecom market.

Market research and service planning

China Mobile Zhejiang prioritizes government and enterprise customers, followed by household and individual customers for full service operation. To enhance competition and tailor better services, we first research enterprise customer needs and expectations, together with their service scenarios and application bottlenecks. We conducted research on

Customer complain or fault detection

TroubleshootingFault analysisMaintenance

schedule

Fig. 2 Complain handling process

Fig. 1 Service handling process

Service inquiry Service provisionProject design Project audit Project engineering

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China Mobile Zhejiang embraces full-service operation

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Moreover, we deploy the service provider gateway (SPG) as a unified gateway for the IMS, which integrates the subscription interfaces of each network element. The SPG provides a single SOAP interface to interconnect with the business and operation support system (BOSS), giving the BOSS integrated subscription commands.

Convergent platform at the core

After deploying the IMS at the core layer, we enrich services through unified access of fixed and mobile services, such as GPON, PBX, HGW, SIP terminals, mobile phones, wireless fixed phones and data cards. These methods enable both mobile and fixed-line customers to enjoy a unified service experience.

In the future, the IMS-based core network can be smoothly evolved into FMC. Between the IMS core network and the application server (AS), an SIP-based IMS service control (ISC) interface is applied to separate services from call control. In this case, we only need to add ASs to deploy new services, without changing the IMS core network and the end result is enhanced full-service operation capability.

Multi-service QoS at the bearer layer

The service quality and user experience are closely related to the bearer network. In addition to data services, CMnet, the bearer network for China Mobile Zhejiang, needs to bear the real-time voice and video services for enterprise customers during full-service operations. We decided to optimize the CMnet to meet the QoS requirements of enterprise customers, especially real-time services.

We u s e t h e C M n e t t o b e a r t h e signaling flows and media streams for high speed Internet access, VoIP and video conferencing services. However, the VoIP and video conferencing services access to the IMS core network through the session border controller (SBC) and ensure the QoS of real-time services.

Customers with GPON access will see a rapid growth when IMS-based convergent services mature. To meet the future growth of service subscription and O&M needs, we have reconfigured and optimized the

GPON networking, IP address and VLAN.

Flexible networking at the access layer

To mee t f u tu re FMC evo lu t i on requirements for enterprise customers on a GPON, the legacy networking is kept intact at the customer side. All voice customers are registered on the IMS, without being transferred by softswitches or IP front end processors.

We have plans to set up 11 access gateways to br idge the l egacy PBX customers and interconnect PBX and IMS. Enterprise customers can also flexibly access the IMS network through the new IP PBX.

Because enterprise Intranets vary and have different QoS guarantees, we tailored voice solutions to fit individual networking needs. Based on the scale and network management capability of each enterprise, we divide our customer groups into Intranet and non-Intranet clients.

Government office and large enterprises usually have Intranets and sophisticated IT systems. QoS and voice services bandwidth can be ensured through internal networks. Enterprise data services can interconnect with SIP terminals, IAD/AG, and video conferencing terminals. Small and medium enterprises without an Intranet can hardly provide effective QoS guarantees, but voice services can be enhanced through the imbedded AG module in an ONU.

By fully considering specific enterprise requirements , we can then provide customers with quality-enhanced services, including high speed Internet, video conferencing and VoIP.

Customer-centric network O&M

Sy s t em change s f o r fu l l - s e r v i c e operation pose higher requirements for network maintenance, including flexible ser v ice provi s ioning, quick market response, level-based service assurance and network security. Convergence of fixed and mobile networks brings richer services, yet more complex service logic.

China Mobile Zhejiang is shifting its focus from individuals to customers from

government, enterprises, and families. A single product and service can no longer meet customer requirements as integrated solutions and one-stop services are now expected. To come out on top in a full-service operation environment, we optimize the O&M structure to meet expanding network, service and customer needs.

We recognize that our strength lies in central ized O&M capabil i ty, the professional O&M team and strong outsourcing management capability, while we are weaker in the area of integrated access O&M both in terms of capability and number of engineers.

Drawing f rom the exper ience o f overseas partners, we have developed some new O&M models.

First, optimize the network department structure and set up a customer-oriented department to open communications with customers. Second, streamline the complex management process and define specific workflows for fixed voice and Internet service respectively to enable fast customer response. Third, maintain the existing managed service and evolve it in line with the global trends.

The O&M optimization of our full service network includes the organizational structures , O&M flows and modes. O&M flows are further divided into specific flows covering service processing, engineering, handling complaints and daily maintenance. Take service processing as an example. We add project design and auditing, plus project engineering to more efficiently process customer applications.

Compared with the original methods of handling customer complains, our new method adds fault analysis and maintenance functions. This can help detect faults in customer networks, facilitate cooperation between departments and respond quickly to emergencies, big and small.

Fine management helps us not only in terms of customers, products and networks, but also to promote O&M efforts, optimize network resources, streamline maintenance, and enhance s e r v i ce suppor t . Wi th an evo lv ing O&M concept, China Mobile Zhejiang has shifted from technology-centric to product/service-centric and most importantly, to customer-centric. Editor: Li Xuefeng xuefengli@huawei.com

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National broadband is on the wayBy Chen Feng & Xu Hong

National broadband initiatives are blooming across the globe and transforming the telecom landscape. In this context, a successful national broadband strategy requires a mature ecosystem for future development and a strong input from government.

South Korea takes the lead

magine a pleasant stress-free Sunday. Jun-Ki is relaxing at home in front of IPTV, his thoughts a million miles away from the office. An onscreen

video message pops up on his laptop–an invitation from his friend to join the online role-playing game (RPG) they both like playing. He accepts and spends a couple of hours gaming before going to meet his girlfriend, who he promised to take to see the new romantic comedy. He uses his RFID card to pay for his subway fare and, once seated, updates his Internet

blog and watches the news on his phone to use up the dead time on the way to downtown Seoul.

Broadband continues to add value to the lives of millions in South Korea. Strategy Analytics revealed that South Korea’s broadband penetration rate led the world in 2008. The widespread application of FTTH and FTTB provides South Koreans with speeds of between 50 and 100Mbps and, notably, FTTH serves over 30% of all domestic broadband users, compared with just 2.3% in the United States by early 2009. South Korea is home to a remarkable 30% of the world’s Wi-Fi hot spots, and 3G phones, PDAs, and wireless laptops are mainstream tools amongst its population of 48 million. The

broad acceptance of broadband is paying economic dividends too–in 2008 ICT accounted for 17% of Korea’s GDP and 40% of its exports.

T h i s s u c c e s s i s a t t r i b u t a b l e t o a c o n s i s t e n t d e v e l o p m e n t a n d implementation strategy. Continual investment in South Korea’s national broadband initiative has been invaluable in deepening broadband penetration and, with close links to economic and industrial policies, is continuing to help maximize South Korea’s competitiveness.

In 1987, the South Korean government emerged as the f irst in the world to establish a national policy to promote ICT in the public and private sectors, and created the National Information

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Society Agency (NIA) to manage high-speed network construction. In 1994, the NIA went on to establish the Korea Information Infrastructure (KII) initiative, which covered a series of 5-year ICT plans, examples include e-Korea Vision 2006, Broadband Convergence Network (BcN), and the u-Korea Master Plan.

I n Fe b r u a r y 2 0 0 9 , t h e Ko r e a n Broadband Plan was launched to improve the country’s ICT infrastructure by 2012. Aiming to provide minimum wired access at 1Gbps and wireless access at 10Mbps, the plan is expected to create 120,000 jobs.

Trends and features

Nat iona l b ro adband in i t i a t i v e s have been taking shape around the world. Australia announced its national broadband network (NBN) scheme, which aims to provide 90% of Australian homes and businesses with download speeds reaching 100Mbps. 7.2 billion USD has been earmarked for the broadband component of the US stimulus package, Singapore has launched i t s 10-year Intelligent Nation 2015 (iN2015) plan, Malaysia is implementing its high-speed broadband program, and Japan’s Next-Generation Broadband Strategy 2010 is underway. Frost & Sullivan forecasts that the broadband subscriber base in the Asia Pacific region will grow at a CAGR of 14.1% between 2009 and 2014, at which

point it will have reached 342.9 million subscribers.

While the schedules and technical detai ls of these national broadband initiatives vary, they have four features in common: ultra-high capacity, openness, convergence, and eco-friendly.

Ultra-broadband

A national broadband initiative utilizes several transformation catalysts to support more powerful applications. The major targets are to accelerate data transfers, achieve real-time collaboration, and simultaneously use multiple applications.

A national broadband initiative has to satisfy bandwidth-hungry applications,

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National broadband is on the way

s u c h a s v i d e o c o n f e r e n c e s , h o m e surveillance, streaming video, and HDTV. Based on similar projects around the world, Huawei’s research indicates that 30 to 100Mbps is the inevitable short-term minimum range. Singapore’s iN2015 project, for example, requires 100Mbps downlink and 50Mbps uplink speeds in 2010.

The main technologies underpinning iN2015 and the growth of Singapore’s future bandwidth demands are FTTH and GPON. iN2015 aims to increase uplink speeds as applications such as video sharing become more popular and continue to devour bandwidth. By June 2009, Nucleus Connect, a subsidiary owned by StarHub under the iN2015 banner, had begun deploying GPON equipment for residential access and a GPON/point-to-point Ethernet mix for commercial buildings. Two speed options are initially planned: 100Mbps downlink/50Mbps uplink or 1Gbps downlink/500Mbps u p l i n k f o r r e s i d e n t i a l c u s t o m e r s ; symmetr ica l 1Gbps or symmetr ica l 100Mbps access lines for enterprise users.

In a d d i t i o n t o F T T H , i N 2 0 1 5 incorporates a national Wi-Fi network that has been up and running for over a year and that, by June 2009, boasted more than 7,550 hotspots for providing free, island-wide coverage in public areas.

Openness

A nat iona l b roadband in i t i a t i ve needs an open network architecture and business model. For example, Australia plans to spend 43 billion USD to create a fiber optic network over the next 7 to 8 years to cover its regional and capital c i t ie s . This NBN wi l l operate on a “structural separation” model in which a single wholesaler will provide broadband connections to retail operators.

The structural separation model allows broadband retailers to supply their services to more regions at faster speeds based on an open NBN that facilitates fair access. Competition is based on the wholesale price, and this will encourage service providers to raise their game in order to attract customers. Tasmania rolled out its NBN in July 2009, the first stage of which

will provide an open access broadband network for wholesale in 2Q 2010, which will serve local customers and act as a reference point for the larger network in Australia.

Convergence

National broadband initiatives must host complex networking scenarios that facilitate convergence, layered QoS capabilities, and varied service level agreements (SLAs). Examples include the coexistence of IP and legacy TDM/ATM services; a rich mix of voice, data and video content; and diverse access methods for both wireline and wireless technologies over a single network.

South Korea’s BcN, for example, aims to develop a next generation network in three stages. The first involved formulating n e t w o rk p l a n s a n d s t a n d a rd s a n d constructing a pilot network during 2004 and 2005. The BcN was then expanded during the second stage in 2006 and 2007 to provide commercial services and access 5 million houses with FTTH access. The final stage, which began in 2008 and will be completed in 2010, covers nationwide deployment and the FTTH connection of 10 million homes.

The government is giving legal and administrative help with issues such as standards and funding research. The telecom industry is constructing the BcN with its own investment contribution and through developing and providing services. Subscribers will be able to access the completed network through various home Intranets and terminals for guaranteed broadband services anytime and anywhere. The network will also provide open APIs to third-party developers thanks to a range of QoS, security, and IPv6 policies.

Eco-friendly

As massive-scale investment and infrastructure projects, national broadband init iat ives inevitably need a robust env i ronmenta l p lan, inc luding the application of clean energy sources and energy-efficient technologies, and the reuse of existing network equipment and site facilities.

Building the eco-system

Public and private sector collaboration is essential for national broadband success, given the variety of stakeholders that span government, operators, vendors, and SPs. Network planning, implementation, and operation require a complete and mature eco-system.

The vital role of government

Governments enable national broadband development by formulating strategies and policies, issuing mandates, and giving administrative guidance to broadband providers. They also need to encourage broadband deployment in rural areas and offer low-cost loans, grants, and tax incentives.

Beginning in the mid-80s, the South Korean government has adopted an exemplary long-sighted approach. This has culminated in a national high-speed backbone network, and a wealth of R&D, IT projects, and ICT applications. It also pushed for extremely low prices for the public sector and free Internet access for schools; doing so has brought the information age quickly into the public realm and enhanced IT education, which further stimulates demand and encourages SPs to drop their prices.

Operators as key partners

Practice has shown that operators are a major force in implementing the national broadband initiative, helping governments draft initiative blueprints, investing in line with government policy, maintaining networks, and delivering services.

Operators have been given full play of their roles in iN2015, the backbone of which is the NGN broadband network. This NGNBN is broken into three conceptual layers: Layer 1 is made up of network company (NetCo) responsible for the passive NGNBN infrastructure, for example, ducts and wirelines. Layer 2 consists of operating company (OpCo) who focuses on NGNBN active infrastructure such a s sw i t che s and t r ansmi s s ion equipment. Layer 3 comprises retail service provider (RSP) responsible for designing,

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Vendors are key providers of broadband equipment, including Huawei, who is currently partnering with Etisalat to deploy GPON equipment and an optical distribution network (ODN) on Al Reem Island, which lies 600m off the Abu Dhabi coast. In September 2009, Nucleus Connect selected Huawei to deliver the end-to-end solution that will power Singapore’s NGNBN project. Based on its specialist teams and rich experience, Huawei is ready to provide strong and tailored service support to help operators across the globe realize their national broadband visions.Editor: Michael huangzhuojian@huawei.com

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building and operating network entities, including servers and CPEs.

The iN2015 has one NetCo, who operates in open access and wholesales wirelines to several OpCos. These OpCos then wholesale services and bandwidth to RSPs, who compete with each other through their service portfolios.

The OpenNet consortium, in which SingTel has a 30% stake, won the NetCo bid. OpenNet has allocated 2 billion USD to the NGNBN project including 700 mil l ion USD for infrastructure construction, with the government putting up an additional 516 million USD.

Nucleus Connect won the OpCo bid,

and is set to enjoy a boost from StarHub’s planned investment of 66 million USD, which wil l help purchase a quarter-century license at 664 million USD. The government is supporting Nucleus Connect and the project with a further 166 million USD.

Third parties support

Third par t ies general ly comprise equipment vendors, CPs, and SPs. All of whom are invaluable given that network equipment, Internet applications, and telecom services form elements of national broadband projects.

Public and private sector collaboration is essential for national broadband success, given the variety of stakeholders that span government, operators, vendors, and SPs. Network planning, implementation, and operation require a complete and mature eco-system.

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Brilliant life powered by Smart CityA Smart City efficiently handles the information boom and creates value across many sectors. Based on a combination of virtual and physical infrastructure and intelligent functions powered by network and IT technologies, Smart City offers a perfect lifestyle choice for individual users.

“an intelligent nation and a global city powered by infocomm”.

In 2008, Singapore’s total communications output soared 12.4% to over 41 billion USD, with the export value over 25 billion USD, accounting for 61% of the total output. 90% of the nation’s enterprises had their own websites, with a 100% Internet usage rate. Household broadband coverage increased from 55% in the previous two

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Brilliant life powered by Smart City

Smart City worldwide

ecent statistics show that over 1000 Smart City projects have been started or are underway in Asia, Europe, the Americas

and Africa. It is expected that there will be 1500 by 2010, with an annual compounded growth rate of 20%.

By Chen Feng & Huang Ying

Singapore: iN2015

Intelligent Nation in Singapore was one of the predecessors to the Smart City. On June 19, 2006, the Singaporean government launched the Intelligent Nation 2015 (iN2015) program. The aim is to improve their competitiveness and ability to innovate within the next 10 years and transform the country into

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years to 82.5%; and 94% of households with children had at least one computer.

Germany: T-City

In Friedrichshafen in Southern Germany, with an investment of 115 million Euros, Deutsche Telekom launched the T-City program to build a prototype project that could guide the operator’s future city construction. T-City delivers a range of cost-effective one-stop services for governmental affairs, entertainment, education, plus health and tourism inquiries.

UAE: DIC

D I C T E C O M ( a s u b s i d i a r y o f TECOM) is in charge of the Dubai Internet City (DIC) network construction and O&M. Due to an influx of international capital and the integration of domestic networks, DIC has evolved into DU, an integrated telecom operator providing communications services for individuals and households, as well as diversified ICT

services for high-end office complexes like Dubai Internet City, Dubai Media City, and Dubai Knowledge Village. Following the wake of success, TECOM and Sama Dubai have set up a joint venture called Smart City to promote the model in Malta and Kochi, Japan.

Cities with best practices

The World Expo 2010 to be held in Shanghai, China will provide a special showcase of “Best Practices Regions” where cities can show off their most innovative and valuable solutions related to urban construction and management.

So far, 44 cities have signed up to participate, including Seoul, South Korea which will exhibit its open government and provide a platform for online policy discussions and information sharing through an e-Government program. Another exhibitor, the city of Chicago, USA focuses on the use of green technologies and protecting natural resources as part of its commitment to building a sustainable and

eco-friendly city. The good news is that all of these practices provide benchmarks for a Smart City.

Whether driven by governments, telecom operators or SPs, these Smart City practices share the same ultimate objective of efficiently serving the public with information.

What characterizes a Smart City?

The Smart City concept includes Digital City and Wireless City. In a nutshell, a Smart City describes the integrated management of information that creates value by applying advanced technologies to search, access, transfer, and process information. A Smart City encompasses e -Home, e -Of f i ce , e -Government , e-Health, e-Education and e-Traffic.

A Smart City is purported to be the fourth in size and importance when it comes to infrastructure after water, electricity and natural gas. The availability of information in a Smart City represents an important standard that measures a city or even a country’s ICT level, international competitiveness and influence. In 2009, the ITU released the ICT Development Index (IDI), which is designed to provide a comprehensive measurement for the ICT advancement in a global, national or regional context.

Geographically, a Smart City can be either an estate built by a developer, an urban economic development zone, a city, a district or even a country.

Oriented to different investors and requirements, a Smart City focuses on different key services, including urban management services, such as e-Police and e-Urban Management, and digital home services relating to home security. A Smart City can provide the following services:

e-Government can greatly enhance governmental transparency and increase the efficiency of handling governmental affairs. Citizens can quickly inquire about or apply for services at home. They can also view news, weather and traffic reports, and tourist information through various terminals , even discuss government policies through online forums.

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e-Traffic mitigates heavy traffic by electronically monitoring and diverting traffic, while reducing emissions and energy consumption through the remote control of stop lights and other energy-guzzling devices needed to keep a city running.

Video surveillance monitors the city in real time to help prevent crime, conduct research and allocate resources appropriately.

e-Health and e-Education allow citizens access to high-quality medical care and education at home. Through high-definition videos or networks, citizens can consult experts worldwide and search relevant information anytime and anywhere.

e-Home helps to ensure the safety of elders and children that are home alone through remote monitoring and can even control indoor electrical appliances.

Technical DNA

Although the Smart City may have different objectives, each of them has the same technical makeup in the construction

of the ICT network (chiefly the inclusion of FTTx) which features integration, ultra-broadband, operation, and environmental friendliness.

FTTx: GPON or P2P Ethernet?

For the last mile of the Smart City, most developers choose GPON, while others are exploring the feasibility of P2P. Accessing the key requirements will help to obtain the best technical solution for a Smart City.

F i r s t , t h e a c c e s s m e a n s s h o u l d accommodate legacy terminals and high-security services from organizations like banks. A Smart City needs to support services like E1, E3, DS3, STM-1, PRI, ATM, FR and X.25. Providing backhaul for mobile base stations, a Smart City should also provide access to GSM-based TDM and UMTS-based ATM services.

GPON outperforms P2P Ethernet in terms of multi-service bearing, because it supports TDM/ATM/IP services and integrates traditional interfaces with Ethernet interfaces. For this reason, Dubai

UAE needed to deploy an independent GPON network that supports traditional services after launching an Ethernet at the beginning of the DWC Smart City project.

Moreover, a Smart City access network needs to carry all the services of different terminals, including VoIP and IPTV services that require high reliability and QoS. GPON has advantages over P2P Ethernet as it supports TDM/ATM/IP services and has different bearer models for varied service types. It also enables dynamic bandwidth allocation for flexible service requirements.

Amid global warming, energy crisis and environmental degradation, it is common sense to protect the environment with green practices. As a model for urban transformation, a Smart City is undoubtedly on the cutting edge. Unlike P2P Ethernet, GPON relies on a passive optical splitter to allow subscribers to use only one GPON port, thus decreasing CAPEX, OPEX, and energy consumption.

In summary, GPON is superior to P2P Ethernet in many ways and especially

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suitable for households and small and medium enterprises.

UC: IMS-based IP Centrex or PBX?

Enterprise-oriented unified communications (UC) currently has two solutions: One is IP PBX and the other is IMS-based IP Centrex. The fact is that these two solutions are suited for different scenarios.

An IP PBX is suitable for a single enterprise, while the Centrex solution is more suited for operators to deliver hosted Centrex services for several companies or large multi-national enterprises. However, the IP PBX requires professional maintenance personnel and that means increased maintenance costs.

The IMS-based IP Centrex, deployed by Smart City developers to del iver hosted PBX services, eliminates the need for separate maintenance and has the following advantages over the IP PBX:

Service and access convergence: IMS separates control from service, and provides open and standardized TISPAN and 3GPP interfaces, facilitating new service development such as IMS-based IPTV and integrated telecom, Internet, media and entertainment (TIME) services, while shortening time to market by cooperating with third-parties. IMS is less related to an access network than regarded as a common core network by various standardization organizations including WiMAX. In the future, IMS can function as a core network if a Smart City developer can obtain a telecom license as did the operator DU in Dubai.

Investment protection: A PBX can generally support less than 100,000 subscribers and its models vary according to subscriber base. If an enterprise’s subscriber base grows, the PBX has to be replaced, wasting money and interrupting services during new installation. IMS supports smooth expansion and can serve subscribers ranging from thousands to millions, thus protecting investment and enabling easy deployment.

To meet hosting requirements, an IMS-based IP Centrex solution provides an ideal option for a Smart City as it outperforms a PBX in terms of both operation and integration.

Business models

A Smart City project involves end users, developers, operators, and regulators and the business model reflects the interest of all participants. The ultimate goal of operators and developers is profit, while regulators want to prevent redundant construction and balance consumer interests with profits.

The common practice is that a regulator will cap operator prices or an operator shares the network with others. The price limit has proven to be ineffective, but network sharing has gained popularity in Europe. The local loop unbundling for the last mile and the bit streams that share more networks have become a dominant practice for CLECs to develop broadband services.

Depending on the openness of network construction and service deployment, a Smart City may have four possible business models.

Private: A developer independently builds a network to deliver services and undertake network O&M.

Dubai World Central (DWC) in the UAE, a 140 square kilometer development zone centered around the world’s largest airport has adopted this model. DWC established a subsidiary called Smartworld to undertake network construction, O&M and provide certain services unrestricted by local telecom regulations, while licensed services were outsourced to local operators.

Contrary to free market efforts as well as telecom licensing policies, this model is difficult to implement as it may incur many regulatory issues.

Exclusive: A developer chooses an operator to construct a network and provide services. Only the operator has the right to operate within the designated area. Because of the open network trend, this may encounter the same regulatory issues as the private model.

Managed: A developer appoints an operator to construct the only network in a specified area and the operator has exclusive rights for network O&M. All qualified operators can deliver services through this network. This model is easily implemented as it minimizes repeat construction, provides more options for subscribers and eliminates the need to obtain a new license.

Nevertheless, finding the right party to construct and operate this kind of network remains a pressing problem.

Open: Similar to operations within a public area, all qualified operators and service providers can construct a network and provide services in the area and subscribers can choose any network and service.

Given uncertainties over regulatory policies, it remains unknown which business model will prevail. Due to the financial downturn, developers tend to be cooperating with operators in network construct ion and O&M, instead of building network by themselves.

Great potential

Smart City construction is complex and risky. To ensure smooth delivery, the developer should select a reliable and responsive partner capable of E2E delivery.

The partner should be able to provide technical advice in the planning phase, supply reliable and flexible solutions, integrated ODN and data center delivery in the construction phase. They also need to bring professional services, expand or upgrade ICT infrastructure and services for varying customer needs and the growing subscriber base during the operation phase.

This is what Huawei brings to the table. Integrated with broadband, communication, data center and professional services, Huawei’s E2E Smart City solutions are tailored for households, enterprises and public spaces.

Developers can deploy more upper-level applications, such as public services, security surveillance, and intelligent buildings. So far, Huawei has successfully implemented the Smart City solution in the UAE DWC project and the Smart City project for Al Reem island in Abu Dhabi.

To keep pace with the changing global economic landscape, enterprises are faced with opportunities and challenges for both industry integration and business transformation. Information technologies can help enterprises meet new challenges and create greater value with the Smart City concept, which is poised to be the most popular solution around the world.

Editor: Pan Tao pantao@huawei.com

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MSOs expand business horizonsFundamental changes are impacting information service providers and forcing them to leverage their unique competitive advantages in the search for new growth points. Multi system operators (MSOs) are also affected by current trends, and are seeking ways to sustain a strong market position.

and providing bundled packages that include voice services. However, entry into the mobile world for most MSOs has been at best shaky, and requires more robust and long-term network development policies to maximize returns.

The mobile march

As MSOs pene t ra t e the t e l ecom industry, telcos are gradually shifting to full service operations with IPTV services based on ADSL/LAN/FTTx competing for traditional TV subscribers. Verizon’s FiOS and AT&T’s U-verse are both challenging MSOs with a range of new options and experiences for subscribers, which reflects the rapidly efficient development paths of both operators.

Mobile services are continuing to supersede fixed services. By the end of 2008, mobile subscribers had reached 3.5 billion, which is expected to rise to 5 billion over the next few years. In particular, the growth of mobile broadband services has not only been explosive, but the market gap is immense. Current trends indicate that mobile broadband subscribers will total 1.5 billion by 2014.

The convergence of industries brings both opportunities and threats. MSOs are no longer satisfying the market with triple services, and are having to compensate for a lack of mobility with a bundle of TV, fixed, mobile and broadband services. This more holistic service range aims to stop fixed subscriber churn, exploit the advantages of video services, increase competitiveness through differentiation, and stimulate further business development.

MSOs now and in the future

ooser government regulations have encouraged the TV and communications industries to open fu r the r and en te r

each other’s once exclusive territories. Conventional cable TV operators are evolving into MSOs with expanded service portfolios that encompass TV, broadband, and fixed phone services.

The MSOs with the highest revenues and most subscribers can be found in North America, Europe and the Asia Pacific. The well-documented economic downturn has caused people around the world to tighten their belts, which has hit businesses hard and seen performance spiral across sectors. The majority of MSOs, however, have ploughed through these tough times with tremendous growth. Fig. 1 illustrates the stable financial conditions and higher ARPUs and profits enjoyed by MSOs compared with telcos.

The succes s o f MSOs i s broad ly attributable to their range of fresh and superior service offerings coupled with the ability to enhance quality of experience (QoE) and functionality for subscribers. When analogue TV gave way to digital TV, MSOs were able to offer more channels and features such as VOD, HDTV, and time-shift TV.

With the advent of TV services such as interactive voting, online games, and reservations and bookings for various activities, aggressive promotional activities have firmly brought value-added TV to the public realm. Such services have opened up new profit streams for MSOs, who are also capitalizing on leasing wired broadband

By Chai Jiayong & Liu Yingke

MSOs expand business horizons

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The lack of wireless spectrum was previously the largest obstacle hindering entry to the mobile market. However, the ITU recently assigned new frequency bands such as AWS, 700MHz, 2.5GHz, and 3.5GHz, for which new licenses are under auction in several countries. North American MSOs, including Comcast, Cox and TWC, have already cleared a path to the mobile market by obtaining a total of 137 AWS licenses. Comcast is now selling Clearwire’s WiMAX services, Cox has selected Huawei to build its CDMA2000 network, and Chile’s VTR is expected to get the nation’s fourth mobile license by the end of 2009.

MSOs’ traditional subscriber groups are families, though their widening service portfolios are mirrored by business strategies that have expanded to encompass additional target subscriber groups; for example, small and medium enterprises (SMEs) that require one-stop office communications solutions. MSOs are now in a position to offer competitive prices and high quality services through broadband/voice packages plus other services such as free TV, enterprise clusters, IM, and integrated video.

Long-term visionService convergence necessitates network

convergence. Future network evolution to IMS and All-IP will simplify network architecture and service management, which will in turn enhance QoE through greater overall efficiency and quality.

Evolving to IMS

The succe s s fu l incorpora t ion o f PacketCable 2.0 into the international IMS standard has intertwined the future of the two. Quadruple service convergence and IPTV wi l l be IMS-ba sed , and broadband and mobile networks will fall under IMS control.

I M S - b a s e d c o r e n e t w o r k s a n d independent sub-networks carrying quadruple services will offer identical interfaces to the BOSS and unify account, service and billing management. Essential measures for MSOs not wishing to enter the mobile market are performing upgrades to existing networks, converging core networks, offering richer services, and

providing flexible and convenient billing mechanisms.

Enhancing the bearer network

The digital flood caused by HD, 3D and user-generated content (UGC) is increasing traffic rates across backbone networks by between 50% to 80% each year, while access networks are experiencing double- or three-figure annual traffic growth. Thus, bearer networks are approaching the E2E TB era.

To remove transmission bottlenecks caused by HDTV and P2P applications, backbone transmission networks may evolve into NG-WDM networks and OTNs to enlarge equipment capacity and augment business capabilities. Overhauling the DWDM can double transmission capacity without new optical cables; router clustering, 40G/100G interfaces or built-in WDM interfaces can dramatically improve the processing capability of digital communications equipment; and SQM enhance differentiated network management.

Ultra-broadband access network

As the most promising ultra-wideband access technology, xPON is destined to lead future fixed access networks and will ultimately accommodate the data over cable service interface specifications (DOCSIS) evolution. xPON is more efficiently, raises bandwidth, and increases access distances while maintaining carrier-class quality. xPON also supports E2E service management, and displays notable advantages when carrying quadruple play services.

With coaxial cables connecting subscribers, MSOs can enable packet data transmission in

both uplink and downlink following network renovations, supporting the development of interactive TV and providing broadband Internet access. In fact, wired broadband forms one of the highest potential profit streams for MSOs. As optical nodes come closer to users, FTTH is no longer a dream; it is easy to deploy FTTH in new buildings to give light speed access to multiple services.

In the wireless field, network evolution will allow old and new technologies to coexist for at least the next ten years, i n c l u d i n g G S M , E D G E , U M T S , HSPA and LTE. Rather than overlaid or independent networks, MSOs instead require a single converged network that provides various voice, narrowband data, and mobile broadband services capable of later adaptation to LTE networks.

All-in-one terminalsFuture bottlenecks may occur with

terminals as networks design eliminates legacy problems. However, in addition to Femtocells, all-in-one, intelligent terminals are set to supersede set-top boxes (STBs), embedded Multimedia Terminal Adapters (eMATs) and cable modems in the home to carry MSOs’ multi-play services.

With a comprehensive understanding of the communications world, Huawei provides one-stop consultation services for MSOs across a wide range of disciplines, including market and economic analyses, strategic planning, service and promotion planning, and network planning and design. Huawei is positioned to help MSOs consolidate their advantages, explore new opportunities, and confidently explore a bright future.

Editor: Li Xuefeng xuefengli@huawei.com

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Fig. 1 Performance of MSOs and telcos

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Unlocking the secrets of SoftBank’s 3G success

Unlocking the secrets of SoftBank’s 3G successSoftBank Mobile conducts the fastest 2G to 3G evolution in Japan. After the acquisition on Vodafone K.K. in March 2006, the operator has sustained leading subscriber growth rates for an impressive 26 consecutive months despite a saturated market and intense competition. Its 3G customers now account for 93% of its total subscriber base. As the unequivocal leader in non-voice ARPU growth, we can surely learn much about 3G operations from SoftBank Mobile’s unparalleled success.

By Zhou Jing

odafone sold i t s Japanese subsidiary, Vodafone K.K., to SoftBank on March 17, 2006. As a holding company

of Yahoo! Japan at the time of acquisition, SoftBank already owned Japan Telecom, Japan’s third largest fix-line telephone operator, and SoftBank BB, Japan’s largest broadband service provider. Foreseeing that mobile Internet is destined to outpace f ixed Internet , SoftBank pres ident,

V Masayoshi Son is dedicated to expanding the company’s existing service portfolio to integrate Internet portal, high-speed data communication, and fixed and mobile services.

While Vodafone K.K.’s 15.13 million subscribers, 16.8% market share and a booming 3G market strengthened SoftBank’s entry into the mobile Internet sector, the competitive hurdles thrown down by NTT DOCOMO and KDDI

still seemed insurmountable. The two Japanese giants enjoyed five times more subscribers than SoftBank at that time. It was widely believed that SoftBank would soon fall flat due to the lack of operational experience in mobile telecommunications.

Surprisingly, SoftBank Mobile secured the largest share of market net adds in April 2007, just a year after its acquisition. Thanks to a collaborative business model and an innovative marketing strategy,

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SoftBank Mobile believes that mobile phones are the key profit generator in terms of Internet access, especially given their prominence in Japanese society. Increasing computing speed and resolution are steering the role of mobile phones towards an Internet access tool, which in turn has driven SoftBank Mobile to revolutionize the market landscape.

In 2006 , Japan’s ARPU was the highest in the world, with voice services contributing 80% of operators’ revenues. High charges for voice services, however, detrimentally impacted service use and customer loyalty. According to Masayoshi Son, revenues from voice services are expected to account for only 3% of SoftBank’s total sales revenues in the next decade. Though in 2006 data services occupied only 20% of its sales turnover, SoftBank began to reorient its focus towards data and shrink away from voice service as a means of achieving sustainable, long-term profits and a stronger market presence.

SoftBank Mobile then consolidated its data tariff plan by attracting subscribers with a very aggressive voice pricing strategy and inexpensive 3G mobile phones. It was anticipated that the resulting losses from voice would be offset by the long-term sales of value-added data services. To raise the quality of mobile phone services, the operator expanded and upgraded its 3G network. In just a year, it doubled its number of BTSs, which now outnumber NTT DOCOMO’s and have dramatically improved network quality. Its corporate and technical strategies have resulted in ARPU variance below 1%, the success of which is remarkable given the prevailing trend of spiraling ARPU.

Distinctive mobile phone customization and sales models

As Japanese operators dictate the direction of the industry chain, phone vendors customize handsets according to demand. Before being acquired by SoftBank, Vodafone K.K. lost a large number of its customers to KDDI and

SoftBank Mobile weathered the storm and continued to grow in strength.

Group synergy pays dividends

SoftBank Mobile synergized SoftBank Group’s resources to s t rengthen i t s brand, service channels, content, cost compet i t i venes s , and a t t r ac t more customers. By fully utilizing the group’s legacy infrastructure, portals, channels, and content, SoftBank Mobile developed a series of differentiated products and services to sharpen its competitive edge in terms of price and marketing.

In partnership with SoftBank BB and SoftBank Telecom, SoftBank Mobile prov ides innovat ive FMC ser v ices , including integrated mail services for enterprise users. Under the brand S!mail, the operator has increased its mobile subscriber base by attracting existing fixed and broadband subscribers. The seamless integration of Yahoo! Keitai Portal into its mobile service portfolio raised SoftBank’s brand equity, won more subscribers, and increased service take up. Cross-marketing strategies that utilize its existing channels and subscriber resources have continued to streamline the company’s resource utilization and maximize returns.

All service branches of SoftBank Group have benefited from service package sales. A year after the acquisition of Vodafone K.K., the SoftBank Group had increased its profits by 19.6%, while SoftBank Mobile enjoyed an impressive 12.1% rise. More remarkably, SoftBank Telecom recovered from a shaky performance. By building a strong Internet service platform that offered rich content, such as music, sport , news, e-commerce, SoftBank constructed a unique model that married rich content, low costs, and a reliable transaction platform.

This aggressive marketing model and the synergy between SoftBank Group’s various subsidiaries catalyzed greater profits and a significant reduction in marketing costs.

SoftBank’s 3G philosophy

NTT DOCOMO, who were offering m o re s t y l i s h p h o n e s w i t h g r e a t e r functionality.

Following the takeover, SoftBank targeted the handset market and began retailing a wide range of slim and ultra-trendy phones in various colors and styles. Outshining those available from KDDI and NTT DOCOMO, Masayoshi Son recalls the company’s simple aim, “We wished to provide customers with the slimmest and most stylish phones.” Innovative designs resulted in a stunning debut in handset retail; for example, the 705SH became the slimmest phone on the market, and the 707SC sparkled with Swarovski crystals.

To integrate mobile telecommunications and the Internet , SoftBank Mobi le concentrated on functionality. In addition to a large, high-res screen; increased memory; HSPA capability; and easy Internet access, SoftBank’s unique handset design catered to subscribers’ fashion, entertainment, and business needs.

Prioritizing ease of use, subscribers can access content such as stock markets, news, music or even their home PC. A simple press of the “Yahoo!” key, for example, directly accesses the Yahoo! Mobile Portal. In addition to the operation system, Windows Mobile Professional Edition 6.0, that offers enhanced stability and functionality, the smart phone X01T integrates other security features, such as fingerprint recognition on its back cover.

W i t h t h e s e e n h a n c e m e n t s a n d innovations, SoftBank’s mobile phones have been a hit in the market to the extent that complaints usually concern waiting times. On June 4, 2008, SoftBank Mobile introduced the iPhone, hoping to attract more music and technology enthusiasts.

However, the more stylish and smart mobile phones come with a higher price tag, forcing operators to offer inducements at the sacr i f ice of prof i t s to attract customers. SoftBank Mobile launched a 24-month installment plan in September 2006 to ease the financial burden of buying a high-end phone, which it supplemented by giving the first 2 months free of base charge, and selective discounts of monthly base charges and data services throughout the contract. This move was also long-term

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thinking on SoftBank’s part; bundled with a two-year contract, SoftBank Mobile was likely to receive at least two years of loyalty with the installment package.

Additionally, SoftBank Mobile reduced distributors’ sales commission by 25% to make this business model more viable. The installment plan has dramatically reduced churn, and 80% of all new subscribers have signed up with the plan. For Q4 2006, SoftBank reported a year-on-year sales revenue increase of 144.3%, with operating profits up a staggering 260.4%.

A competitive tariff strategy

SoftBank Mobile’s pricing strategy is to attract customers with low voice tariff and raise overall ARPU by offering the simple and clear data charges.

Cost-effective voice service plans

On October 24, 2006, Japan launched the Mobile Number Portability initiative. SoftBank Mobile had slashed its mobile voice charges the day before to give free domestic calls and SMS across its network, as well as a series of other preferential fees, to compete with KDDI and NTT DOCOMO. To maintain quality while offering free calls , SoftBank Mobile charged JPY21 per 30 second during peak hours if the total monthly free call t ime between 9:00 am and 1:00 pm exceeded 200 minutes. Three months after implementation, SoftBank had signed up 490,000 new subscribers, the second largest increase in net adds.

On Januar y 16 , 2007, So f tBank Mobile launched the White Plan. With a monthly base charge of JPY980, this simple charging plan centered on free intra-network calls between 1:00 am and 9:00 pm, and JPY21 per 30 second for other calls. In contrast, the then top two operators, NTT DOCOMO and KDDI are running with JPY4,000 monthly base charge and JPY40 per minute. Within a quarter of implementing the White Plan, SoftBank Mobile overtook KDDI to rank first in Japan with net adds totaling 39.78% of the market.

On March 1, 2007, SoftBank Mobile launched the Double White Plan, which doubled the White Plan’s monthly JPY980 base charge and entitled subscribers to a 50% discount on calls between 9:00 pm and 1:00 am. On May 10, 2007, it followed this with the White Plan Family Discount 24, which allowed free calls between family members for White Plan subscribers. In just 6 months, White Plan customers soared to 9 million–60% of SoftBank Mobile’s total customers. Double White Plan subscribers topped 2.7 million, 70% of whom also signed up to the White Plan Family Discount.

Interestingly, these low price plans only increased SoftBank Mobile’s MOU to 155, an increase of just 10 minutes, compared with NTT DOCOMO’s and KDDI’s MOU of 140. This demonstrated that voice prices could be slashed as part of a profitable price strategy.

Bundled data services

In a departure from KDDI’s “flat rate” tariff plan and NTT DOCOMO’s “Pake-Houdai” usage-based plan, SoftBank Mobile launched preferential packages for both individual and enterprise users, one of which gave subscribers to its package

of mobile calls, Internet, and mobile data service discounts totaling up to 70%. For a monthly charge of JPY315, an individual could receive a combination of SMS and Internet access services, a reduction of JPY980 compared with a separate subscription to each.

SoftBank Mobile also tapped into the lucrative Netbook “large screen” market, knowing that doing so would fuel a great surge in data traffic, burden mobile backhaul capacity and raise bandwidth costs. With bandwidth-hungry devices such as Netbooks, cost reduction became imperative to enhance its wireless Internet access services. By consolidating the group’s subset of services and to provide rich content, SoftBank Mobile had already established a unique advantage with its phone “small screen” services. For large screen services, the operator partnered with EMOBILE as its route to success.

Entering Japan’s mobile market in March 2007, EMOBILE provides the country’s cheapest wireless Internet access thanks to a range of cutting-edge technologies. These include distributed Node Bs and All-IP transmission which build a cost-effective and efficient HSPA network. The two operators embarked on a synergistic partnership that fully utilized their joining resources under the parameters of network sharing and separate pricing. SoftBank Mobile swiftly expanded its wireless Internet access services at no extra cost, and EMOBILE profited considerably from leasing its network to SoftBank. In February 2009, SoftBank launched its monthly wireless Internet access service package at a similar price to EMOBILE’s.

Diversified mobile Internet services

Low pricing strategies alone are not enough to drive profits. To raise ARPU, operators must offer differentiated services that are impossible to be copied in the short-term. SoftBank Mobile believes storage and functional improvements to mobile phones will gradually shift fixed Internet services, like data download,

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Unlocking the secrets of SoftBank’s 3G success

In just 6 months, White Plan customers soared to 9 million–60% of SoftBank Mobile’s total customers. Double White Plan subscribers topped 2.7 million. On the other hand, SoftBank Mobile launched preferential packages for both individual and enterprise users, one of which gave subscribers to its package of mobile calls, Internet, and mobile data service discounts totaling up to 70%.

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customize their domain space and avatar to tour virtual cities, go shopping, play games, and chat with other subscribers. Built in a 3D environment, S!Town extends far beyond text ing, photos and videos to give a completely new subscriber experience. Payment is usage based without monthly base charges: first-time access generates 25KB of data traffic for JPY40 (0.4USD) and personal room customization consumes 100KB for JPY160 (1.6USD). As S!Town also provides subscribers with links to other websites, advertising is expected to become its leading revenue stream.

An impressive brand strategy

S o f t B a n k Mo b i l e a l s o b e n e f i t s considerably from innovative brand planning and advertis ing strategies. According to Commercial Message (CM), the SoftBank Mobile’s series of “White

Email, location, searching engine, and instant messaging, into the mobile domain to give unrestricted access.

SoftBank Mobile has as such launched a series of mobile Internet services: S!Felica, S!GPS NAVI, S!CAST, S!LOOP, S!CITY and S!Comic. Independent from mobile data services, these are being integrated with other resources of the group to maximize service reach. For example, by combining Yahoo! BB and mobile communication capabilities, SoftBank Mobile has created the mobile portal, Yahoo! Mobile, to provide content that users normally expect from fixed broadband.

Usually used individually and always on the move, mobile phones facilitate the mobile social networking services. In October 2006, SoftBank Mobile unveiled the wor ld’s f i r s t 3D mobi le v i r tua l community service, S!Town. Targeted at girls aged between 18 and 24, S!Town attracted 100,000 subscribers in just four months after its launch.

The service a l lows subscribers to

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Family” ads consistently rank top among Japanese households. Featuring a Japanese mother and daughter, a black son, and–of course–a white Hokkaido dog father, this innovative ad series has continued to illustrate the benefits of the White Family plan since 2007.

Working for SoftBank, the daughter recommends various products that add value to the family and bring the brand to life in a humorous, family-oriented way. Amongst the public, this has served to engender trust in SoftBank and its products, and the characters–notably the black son and dog dad–have become celebrities!

As a latecomer to Japan’s 3G arena, So f tBank has re shaped the marke t landscape and stayed at the forefront of successful mobile Internet theory and practice. SoftBank’s success has derived from its insight into mobile Internet trends and the implementation of reactive and innovative business models.

Editor: Xue Hua xuehua@huawei.com

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By Pan Fei & Wei Mengjiang

Successful 3G operation in emerging markets

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Successful 3G operation in emerging marketsExploring the new turf of emerging markets requires specialized tactics for 3G operations. Mobile environments there can be vastly different compared to mature markets.

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t is important that 3G development in emerging markets matches local needs, given that user consumption patterns change with the country.

In most emerging markets, people under the age of 25 make up 50% or more of the total population. That means fresh and cool content and applications and a strong demand for audio and video entertainment and social networking. Moreover, growing needs for information coupled with poor fixed line and Internet infrastructure creates an enormous demand for practical, value-added life enhancing services.

The poor fixed-line infrastructure and a low PC and Internet penetration rate makes wireless Internet access via mobile devices a much more viable solution.

Finally, on average, income is lower and people tend to have less education

than their counterparts in mature markets. Prices for services and terminals should be reasonable and the pricing structure must be simple and clear.

Subsidized custom terminals

Take Columbia for an example, most handsets are priced around 20 to 30USD and the same goes for India. In Venezuela, Vergatario handsets that sell for 14USD are being snapped up as soon as they come off the assembly line. The core profit in 3G is the operation of value-added services, and the terminal experience directly impacts subscription and the usage patterns of value-added services.

Good terminals will drive the consumption of data services. In India, five times more customers use mobile Internet access compared to those using PC Internet access. The primary Internet access method is via a handset instead of a computer in many emerging markets. Terminals play a vital role in pushing forward services. However, the small-screens and low powered CPUs in the low-end handsets that are popular in emerging markets cannot assure user experience.

Today, the prices of 3G terminals are still far higher than those of 2G or fixed terminals. Subsidies are one good solution for operators to increase the number of cost-conscious subscribers using 3G.

The largest mobile operator in emerging markets is China Mobile and they offer deep discounts on terminals to promote 3G. Generally, the longer the subsidized contract, the more subsidies the customer feels they are getting, but the reality is that the subsidy rate is actually lower. Long-term contracts also effectively reduce the churn rate.

Tailored terminals can greatly improve the service experience, helping operators to promote services like mobile TV. A TV shortcut key put on a handset by some operators makes it easy for subscribers to watch mobi l e TV programs and providing a special screen helps as well. When a customer turns on his handset, the customer will see the operator’s screen and applications and will usually click on it. This is a proven method for enhancing

customer loyalty and China Mobile for example, provides a lot of widgets and a wide range of rich applications.

Recommended 3G servicesThere are numerous 3G services to

choose from. The following tried and true services are recommended for operators in emerging markets.

Mobile music

Mobile music is currently the largest source of 3G revenue. It has already developed from simple ring tones and ring-back tones to song downloads. At present, 70% of all handsets worldwide support MP3. This has laid a good foundation for further development. However, all consultation organizations have reduced their revenue forecasts for mobile music worldwide.

Free music downloads seriously affects mobile music services. Yet, compared with mature markets, emerging markets are now more naturally positioned to develop the mobile music segment. Low PC and Internet penetration in emerging markets instead, puts a bridle on piracy. Since young people make up a large demographic in emerging markets and they are voracious consumers, offering music makes good sense.

In general, emerging markets are not totally open and educational levels tend to be lower, making the localization of services especially important.

The music library at China Mobile, for instance has over 90% local content. More importantly, localization should be reflected in promotion strategies like the “RBT replication with one keystroke” function provided by Huawei for Indian operators Reliance and TTSL.

It is used by over 50% of all subscribers in India mainly because of low Internet penetration, in contrast to many other countries where people mainly order ringback tones from the Internet.

In emerging markets, the ringback tone service will remain a popular music product for a long time. An operator can integrate ring tones, ringback tones and whole songs on a portal which pushes music downloads like Apple’s highly

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critical to a person’s life and low prices entice consumers to use them. Generally, the prices of 3G voice services should not be higher than 2G voice services with the prices of 3G data services far lower than the prices of 2G data services.

The following are two value-added service package schemes:

Scheme A: Voice is the main product which is combined with banner 3G products.

Scheme B: Banner 3G service is the main product which is combined with free voice and other services.

In other words, an operator that is starting 3G operations can use voice services to drive the consumption of 3G services so that people can get familiar with 3G. In this case, scheme A is more appropriate. After a certain time of development, when value-added 3G products are widely accepted, scheme B can be adopted. To stimulate consumption, subscribers can also get voucher points according to their amount of usage to exchange for voice minutes.

For wireless broadband access, based on handheld devices an unlimited flat rate plan can work well because the small screen and low battery capacity of most handsets naturally decreases the amount of traffic.

For data card service, a flat rate + charge out of bundle are more appropriate. A flat rate features a low price to performance ratio. It is easy to understand and handset limitations can help prevent bandwidth abuse. Currently, the flat rate bundled plan is the most widely applied.

In emerging markets, most customers have lower requirements, less disposable income and are not familiar with using data services. Before a new service is promoted, a free trial subscription helps enormously. One example is China Mobile and their gain of over 40 million subscribers for a mobile newspaper by offering three months for free.

There are some general guidelines to follow before beginning 3G operation in an emerging market. The most important thing to do i s to apply appropriate terminals, services and pricing strategies which are loca l i zed , p lus network , branding and channels should also be taken into account.Editor: Liu Zhonglin liuzhonglin@huawei.com

successful iTunes.

Money on the move

Among numerous mobile value-added services, mobile money transfers and banking are targeted in emerging markets.

Financial infrastructure and facilities are usually under-developed. According to the World Bank, in 100 countries, over 55% of adults have no bank account and in 40 countries the figure grows up to 80%.

Eight years ago in Kenya, operator Safaricom launched the M-PESA (M for mobile, pesa is Swahili for money) service to transfer money using a mobile phone. In that time, the number of customers has risen from 20,000 to 16 million. Mobile banking is also doing well in the Philippines. Many Filipinos working abroad send their earnings back home with their mobile devices and with many workers working abroad, such trend continues upward.

Mobile banking and services alike not only provide convenience to people’s lives but also have great cost advantages. In the Philippines, the fee for bank services is 2.50USD while mobile banking is only 50 cents. In Pakistan, the cost for building and operating a bank branch is 76 times more than that for building and operating a mobile bank.

In the past, mobile banking customers were most concerned about security. Now, the data transfer and processing functionality of 3G handsets is strong and stable. After encryption and digital certificates are used, users no longer have to deal with slow response time and potential security breaches.

In the past, SMS-based mobile banking services restricted expansion because of the indirect methods and complicated operations. Today, the high bandwidth of 3G networks and robust 3G handsets ensure the normal operations of WAP-based mobile banking services, making them more seamless and convenient.

Mobile TV

Market research indicates that in many countries, mobile TV is one of the most desired 3G services. News can be viewed at any time and exciting sports matches and concerts will no longer be missed.

The reality is that 3G mobile TV can be a real headache for operator, especially in emerging markets. Streaming video and television require high bandwidth.

This imposes great pressure on a fledgling 3G network and the high bandwidth requirements will inevitably lead to higher prices, hindering its popularity. In terms of financial gains per Mbps of traffic, mobile TV contributes the least return. Mobile TV needs to be used in a creative way, to attract and retain customers, before steer them to other more profitable services.

Mobile broadband Internet access

Banking and television may not be suitable for all emerging markets, but mobile broadband access has broad applications in most developing markets.

Poor fixed-line infrastructure is common in most emerging markets. As more and more people own PCs, they are demanding higher bandwidth. 3G data card services are doing well for Vodacom in South Africa, Mobily in Saudi Arabia, and Claro in Brazil. Presently, the major challenge is to match the development of data card customers with network construction. Many operators found that after developing data card services, the subscriber base grew so rapidly that it caused congestion leading to a sluggish network response. Then, the user experience was diminished and the end result is growing dissatisfaction with the operator.

Internet services and applications are the backbone of mobile broadband access. Given the history of emerging markets, a wise choice is to ally with content providers or provide an integrated service platform. Individual subscriber information and their consumption and surfing habits are the most valuable assets and an operator has a natural advantage in obtaining such information. It might be best for operators to keep metrics and other consumer information close to their vest to assure a core position in the industrial chain.

Simple flexible pricingProper pricing techniques include a

low-price strategy for 3G operation, the reason being that 3G data services are not

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By Huang Wangshun

Smart mobile broadband with differentiated operationsA tidal wave of data, the spike in sales of smart phones and the popularity of mobile broadband plans have fueled explosive growth in the mobile broadband market. The trick is for operators to maximize profits by capitalizing on the opportunities of the 3G era and avoid being mere pipes.

Operational challenges

n traditional mobile broadband opera t ions , the mobi l e beare r network is a pipe, without definitive differentiation of content and data.

Lacking a variety of charging and service control policies, operators cannot provide accurate differentiated services based on customers and applications. With the increase of mobile customers, more complex applications, and the convergence of fixed and mobile networks, operators are facing challenges like enhancing profitability, charging capability and enhancing user experience.

Traffic grows, but not revenue

The traditional growth model where income grows along with the customers is no longer sustainable in the 3G age. On the contrary, the explosive increase of mobile data traffic makes the costs of

network construction and maintenance rise exponentially. This is because large volumes of low-value P2P traffic consume over 60% of total bandwidth. Traditional flat rate charging plans also accelerate P2P traffic.

The tsunami of low-value traffic clogs networks and impacts other high-value services, lowering overal l QoS, user experience and satisfaction. Because of the mercurial nature of active and idle hours for P2P traffic, operators can not concisely plan and construct networks.

Simple charging mode

The fast growth of the mobile Internet results in diversified services and complex charging requirements. Existing charging systems are now challenged by the new requirements.

For example, high-value applications l ike stock trading and smal l money transfers require real-time authentication and payment. Users also want to know

their consumption details and real-time bills.

Operators also want to have a real-time control mechanism to avoid the risk of outstanding bills. In addition, they need real-time credit control to prevent any fraud that might happen in the complex value chain. In addition to providing customers with tailored data and video services, an operator must also take into account the appropriate charging mode.

Ensure user experience

Standardized operations and excellent service are the core competitive edges. During operations, the frequency of usage and loyalty of customers depend on their experience and this has an immediate effect on an operator’s bottom line. User experience also is enhanced by offering unique services, rich content, a fair price point and fast access.

Operators need to divide customer s e g m e n t s a c c o r d i n g t o c u s t o m e r

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requirements. Then, configure, deliver and implement policies, roll out services to meet diversified and personalized requirements and launch attractive services quickly. Operators can also adopt flexible pricing and incentive policies to guarantee QoE and create value.

Differentiated operation sets the trend

The content recognition and service awareness of deep package inspection (DPI), together with its wide deployment in mobile broadband networks, help operators with differentiated operations. I t c o m b i n e s p e r s o n a l i z e d s e r v i c e control, content charging, customer behavioral analysis, content optimization, personalized services and security.

Differentiated bandwidth control

The adage of “bandwidth is service” is the basis of differentiated operation in that the operator allocates bandwidth resources

with preference given to high-value services and high-end customers.

By analyzing services consumed and the corresponding bandwidth required, operators can intelligently schedule to optimize network traffic and guarantee the bandwidth requirements of different customers.

For high-end customers, operators can bind P2P services with high bandwidth so that the service experience is guaranteed when the customers order P2P service. For low-end customers, operators can limit the P2P bandwidth in busy hours according to the network load and impose no limit when network load is not heavy. For illegal P2P traffic and low-value P2P traffic, a blocking policy can be adopted to lower user experience and the impact of low-value traffic.

Diversified charging

Traditional duration or traffic based charging mode no longer works for differentiated operation in the mobile Internet. Flexible charging based on

Service operation layer

Service control layer

Service bearer layer

Speedup configuration

Content charging

SCG=Service Control Gateway

Internet

Intranet

Operation analysis center

Service analysis center

Advertising platform

Unified portal BOSS OCS SCP

Service records

Service logics

GPRS/UMTSTD-SCDMA

LTEWiMAX/Wi-Fi

Fig. 1 Topology for differentiated mobile broadband operation

customer, traffic and content appears to be the inevitable trend.

European operators started charging for content early on. With content-based charging, the uplink and downlink packets of a customer are filtered and analyzed to differentiate the type of content transferred, and then send related information to the prepaid or postpaid charging system for flexible processing. Content-based charging enables operators to provide more segmented value-added services and more precise billing. The end result in most cases is more profit and a higher customer satisfaction.

Differentiated operation model

After a lot of new customers join a network, the operator should segment customer requirements and adjust their operating strategy to find a new business model. For example, if customers can modify their packaged services online, it is more interactive and this enhances satisfaction, ultimately increases ARPU, market share and revenue.

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and service attributes. Take level-based charging for example, MegaFon has different charging policies to combine different traffic, duration, fixed rates and content. This helps to ensure the growth of higher-value services like Email, streaming media and music. Also, MegaFon prevents the use of accounts with insufficient balance, which enhances its mobile data revenue by 20%.

Precise marketing and service innovation

An operator can deploy platforms including SCG, operation management center, operation analysis center and mobile advertising platform to target marketing efforts.

The SCG collects original access data (URL) of customers and sends the data to the operation analysis center. Then, the operation analysis center analyzes the consumption and buying potential of the customers to identify their interests and preferences.

High-va lue customers and high-value services are differentiated, creating not only new business models, but an opportunity to introduce hot new services.

The operator then adjusts service policies according to the analysis and releases the new policies to the operation management center, which del ivers the new operation policies including bandwidth control and pricing policies to the SCG. Based on the customer behavioral analysis, the operator can use the mobile advertising platform for ad targeting.

Operator M deployed its operation analysis center and mobile advertising p la t form in ear ly 2009 to measure customers and traffic by types like sports, finance, automobile, travel, and food.

Through pricing and control policies, Operator M developed high-value services, such as Mp3, trip and sport. Then they delivered precise ads to selected people with special interests in music, movie and sports. As a result, Operator M actually increased its customer base and revenue amid the economic downturn.

Editor: Chen Yuhong chyhong@huawei.com

Advertising is important and the ad must be precisely targeted to be effective. Success is predicated on the coverage of ad recipients and the timing and precision of the advertising.

Bus ine s s in t e l l i g en t t e chno logy monitors traffic in real time and analyzes user consumption and purchasing potential to help identify customer preferences of services and products. Mobile advertising is a valuable tool and in the right hands can add innovation and revenue.

Service network support

The typical service network model can be broken down to a service bearer layer, a service control layer and a service operation layer, as shown in Fig. 1.

The service bearer layer is the traffic delivery channel and implements the differentiated operation policies. It consists of service control gateways (SCGs), including the WAP gateway, web gateway, and content charging gateway (CCG). The SCGs process and control WAP1.x, WAP2.0, HTTP, streaming, Email, FTP and P2P services.

The bearer layer implements service control policies for charging, adapts and enhances contents. It also controls bandwidth and access, plus has antivirus p ro t e c t i o n . T h e b e a r e r l a y e r a l s o provides the service operation layer with information related to service operation for service analysis.

The s e r v i c e cont ro l l a ye r i s the management center for service policies. The center has unified policy management and delivers the policies to the entire network for immediate implementation. This layer helps to clarify the capability of the service bearer layer and contributes to unified service.

The service operation layer consists of an operation analysis center, an advertising platform (value-added service platform) and portals. The operation analysis center obtains service data (like URLs) from the bearer layer for deep mining and analysis, identifies services and customers, provides reference for policy creation, and differentiates services and customers. The advertising and value-added service

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platforms can then pinpoint specific services and goods to advertise.

Building a smart pipe

Differentiation as previously outlined, can make good use of limited resources to provide quality pipe services. Taking advantage of a large customer base and the rich services of a mobile network, operators can avoid being a dumb pipe with more proactive operations.

Bandwidth on demand

Bandwidth control identifies individual customer requirements and allocates different bandwidth and service control policies according to their levels and service usage. Packages are differentiated accord ing to cus tomer and se r v ice attributes, and operators can use the SCG and the operation management center to control bandwidth and adjust fees.

In a t y p i c a l o p e r a t i o n s m o d e l , customers are divided into gold, silver and bronze levels.

Gold-level: P2P services are allowed with limited bandwidth (BitTorrent = 2Mbps, P2P = 2Mbps).

Silver-level : P2P services are also a l l owed , bu t w i th l e s s b andwid th (BitTorrent = 2Mbps, P2P = 1Mbps).

Bronze: only HTTP services are offered without BitTorrent and P2P access.

Different pricing policies are defined to match the service packages and realize bandwidth on demand.

Vodafone UK started 3G bandwidth control in 2007. Customer satisfaction and revenue rose with an ARPU increase of 12%. The bandwidth control policy of PCCW defines a 5GB threshold. When a customer’s P2P monthly traffic exceeds 5GB, data speed will be limited and prioritized for the high-value services.

Flexible content charging

Content charging modes include: flat rate, traffic-based, duration-based, calculation-based and content-based.

MegaFon started SCG deployment in 2008 and implemented different charging policies according to customer contracts

Business Mode

DEC 2009 . ISSUE 53

Mobile broadband: more than just a price war

By Bai Ju

Mobile broadbandmore than just

a price war

Homogeneous competition tends to degenerate into a price war to win customers. However, for operators, is it an inevitable trade off for them to leverage profits through terminal subsidy, low prices, and discounts for attracting subscribers?

and then mode. Charging dimensions cover traffic, duration, content, service level, time, and distance etc. The three most common dimensions for mobile broadband are traffic, duration, and QoS. The first two can be used together and integrated with different QoS levels.

Traffic-based charging

Charging based on data traffic is the most widely applied method for mobile broadband. Although traffic volumes are defined, it is difficult for subscribers to control or calculate their data usage levels or expenditure. Many operators have sought to solve this issue by providing online data traffic estimates that allow subscribers to select a data package based on individual consumption habits such as daily Internet usage and downloaded content.

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Price is not the only weapon

hile mobile broadband services have developed steadily over recent years, mobile broadband access

is still in its infancy stages. Currently, subscribers are attracted by Internet content, services and applications, and mobile broadband access is simply a way of getting connected.

Mo b i l e o p e r a t o r s l a c k a s t r o n g involvement in what mobile Internet actually provides and remain focused on lowering the price of broadband. However, doing so devolves competition into a price war, which should never be operators’ only option. Instead, differentiated pricing structures can represent a flexible charging policy that works as part of a competitive mobile broadband access strategy.

Pricing strategies first consider dimension

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28% in just one year, which in turn sent traffic into the stratosphere with a twenty-fold increase!

Statistics reveal that flat rate subscribers generate five times, while unlimited flat rate subscribers produce 50 times, more data traffic than pay as you go subscribers; this also encourages large volumes of P2P traffic. To guarantee high network per formance and avo id exhaus t ing network resources with low-value P2P traffic, operators require a charging mode that both attracts subscribers and guards network resources.

Fig.1 lists the charging modes of mobile broadband access and demonstrates the relationship between expenses and service usage. A1 and A2 are pay as you go modes; A2 is more complex, but encourages higher usage. B implements a charge cap based on A1. Though high, this cap is designed to prevent shockingly high bills.

C2 is the simplest and most attractive to subscribers, but creates large network loads. C2 should be used for short-term promotions or bundled with fair usage policies that curtail a subscriber’s access when traffic exceeds a defined limit. Based on C2, C3 effectively avoids the misuse of network resources, but not user friendly. Thus, C1 is recommended as it sets a limit and charges an excess fee if this limit is exceeded.

In practice, charging modes can be combined to create more complex charging modes that maximize both customer satisfaction and returns for operators.

However, th i s mode l i s f a r f rom satisfactory as subscribers still do not know how much traffic they have used and may get a shock when their bill arrives. To increase transparency, operators can set up systems for subscribers to keep track of and manage their expenditure. This can be done through SMS statements, limit reminders, or automatic package upgrades if a limit is reached.

China Unicom currently offers three monthly mobile broadband packages: 22USD for 3GB, 29USD for 5GB, and 44USD for 10GB, with 1.5 US cent charged for each excess MB. If a customer has purchased the 3G package but uses 4.5GB in a particular month, the package automatically upgrades to 5GB at 29USD rather than charging 44USD for the basic package plus the excess.

Duration-based charging

Based on online hours or days, duration-based charging is easier for subscribers to understand and accept and is usually implemented in two ways: First, a fixed daily rate regardless of actual usage, such as 2.6USD for a day, or 10USD for a week. Second, online duration charging is based on actual online time and typically includes a validity period and an excess rate. For example, an operator offers a 30-day package at 12.9USD that allows 10 hours of access (accumulate online duration). Excess use is charged at 5 US cents per minute and the package expires after 30 days.

China Mobile Beijing originally set up traffic-based monthly packages, including 3USD for 150MB, 7USD for 500MB, 15USD for 2GB, and 29USD for 5GB. However, this model is diff icult for subscribers to understand. Consequently, China Mobile Beijing launched two duration-based monthly mobile broadband packages in July 2009: 9USD for 60 hours; and 18USD for 240 hours, which includes 3 hours national roaming.

Duration-based charging is complex and subject to abuse–subscribers can exploit a high speed 3G network and generate huge amounts of traff ic. A fair usage policy is needed to eliminate excessive traffic by identifying when a

given threshold is exceeded and then increasing the chargeable fee or slowing the access rate. The system can detect if a subscriber is online, record the duration, and mitigate idle use when a subscriber has not disconnected but is inactive.

QoS-based charging

QoS-based charging charges higher fees for better products and services. For example, operator E offers two packages at different access rates: Standard Unlimited p rov ide s 384Kbps fo r 26USD and Premium Unlimited 7.2Mbps for 52 USD; after 6GB traffic is reached, the rate is limited to 64Kbps.

QoS-based charging originates from fixed broadband access rates. However, the erratic air interface rate of mobile networks complicates the wide application of QoS-based charging for mobile broadband. Though not yet mature, QoS-based charging is worth further consideration and is likely to be widely applied as mobile technology develops.

Tailored charging

Operators can apply differentiated pricing policies through a range of charging modes. Many have launched unlimited flat rate packages to attract new subscribers. While effective, such packages result in huge amounts of traffic. One operator, for example, increased its subscriber base by Editor: Xu Peng xupeng@huawei.com

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Fig. 1 Charging modes of mobile broadband access

Usage (traffic or duration)

Charge

Flat rate with usage cap

Pay as you go

Flat rate + charge out of bundle

Unlimited flat rate

Pay as you go with descending rates

Charge cap

A1

C1

C2

A2

C3

B

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Synergies boost mobile broadband

Synergies boost mobile broadband

The emergence of mobile Internet has been accompanied by a continuous stream of new services, intelligent terminals, and application stores. Acting in combination, these cause data traffic to soar to a level that will lead to more complex risks in network and operation than the voice era. Synergy between networks and services has become one of the preconditions of success.

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By Zhang Ping & He Zhichao

Huawei Communicate

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Huawei Communicate

resolved the problems of operator P regarding following two aspects.

First, synergy of network and service development: After throughput analysis and data mining, the joint team identified traffic patterns and subscriber behaviors. At the same time, combining with network performance and cost breakdown, the estimation of service delivery cost per MB will be provided and tariff package was evaluated respectively. All these analysis results offer a sound proof for operator P to adjust its operation strategies, and find new revenue point of innovation service.

Second, synergy across the entire network: based on future throughput estimation, the joint team conducted a comprehensive network evaluation, and identified potential resource bottlenecks and risks. Moreover, combining with data mining on network behaviors, elaborate network configuration and solution optimization have been suggested to ensure E2E network quality.

Synergizing network and service development

O p e r a t o r s p o s s e s s a w e a l t h o f methodologies, knowledge, and experience regarding the behaviors of voice subscribers and its impact on network capacity. Data traffic, however, brings uncertainty on the relationship between network KPIs and subscriber behavior due to diverse service types, large traffic volumes, and

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A sticky dilemma

o b i l e b ro a d b a n d i s a n integral part of modern life and is gradually altering everyday communication,

business activities, entertainment, and access to information.

Operators are concerned with how mobile services can generate meaningful re turns whi le sa t i s fy ing subscr iber requirements. Intense competition and the new uncharted world of mobile broadband started a race among operators to build networks and offer innovative services. But then, it comes with endless adjustments on service development and network expansion.

Opera tor P fought i t s way f rom cha l l enger to v i c to r in the mobi l e broadband market it operates in. Within just 4 months of commercializing its network the operator had attracted over 1 million 3G subscribers, 300,000 of whom signed up for mobile broadband.

However, such the swift increase in users coupled with a wider service array swamped operator P’s network. Resource consumption far exceeded predicted levels. Therefore, degraded quality and reliability suddenly became very real threats as the capacity ceiling came into view. Urgent network expansion and adjustment became frequent need.

Faced with increasing operational complexity and network management experience limitations, operator P together with Huawei established a joint team to evaluate its mobile broadband network in terms of traffic patterns, network behaviors , key to profitabi l i ty, cost baselines, risk minimization, and E2E quality optimization.

Synergy: the sum beats the parts

Based on the understanding of E2E planning, the joint team comprehensively ana l y zed the t r a f f i c o f the mob i l e broadband network of operator P, and, in combination with Huawei’s global experience in network deployment,

unpredictable subscriber behaviors. In particular, the prevalence of flat rates and lower service tariffs have encouraged users to consume more bandwidth. Data from Huawei shows that traffic under a flat rate exceeds that generated under traditional PAYG by between 20 and 50 times.

Indeed, operator P’s lowered prices and flat rates had increased traffic dramatically, which impacted all aspects of its broadband network, including the wireless access network, the IP backhaul and the core network (CN). As network visualization is impossible in current mobile broadband systems, it is tough to monitor subscriber behaviors and throughput status. To bypass this restriction, the joint team adopted temporal and spatial domain aggregation dur ing data mining to fu l ly revea l network behaviors and characteristics, the relationship between traffic and subscriber numbers, rate patterns for individual subscribers, traffic distribution between different services, major online periods, average usage time, and preferred service types.

The results showed that 62% of all traffic was P2P, 27% was web, and that the uplink and downlink split was 26% and 74% respect ive ly. Moreover, i t became evident that several previously reliable traffic benchmarks had changed significantly. For example, 20–25% of traffic in traditional voice networks occurs at peak times; however, in operator P’s network, this had dropped to less than 8%, almost half the predicted 15%. This also shows the current trend in which daily usage patterns are flattening, with traffic averaging 5–7% of all traffic throughout the day in every typical area.

Operator P employed the outputted data to evaluate key service performance and plan new services based on market conditions. Thus, it could synergize its network with business development. Moreover, operator P can accurately make out the service delivery cost (cost/MB) with certain depreciation periods, based on characteristics of the network and subscriber behaviors, equipment performance, and the composition of network costs. Service delivery costs were used to develop pricing strategies for different operations. This was formulated

Based on the understanding of E2E planning, the joint team comprehensively analyzed the traffic of the mobile broadband network of operator P, and resolved the problems regarding two aspects: synergy of network and service development and synergy across the entire network.

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against a transparent backdrop of network capabilities and the profitability of high-end and low-end tariff packages.

Fig. 1 shows that the proportion of 5GB and 10GB tariff packages gave the mixed data allowance of 6.3GB for operator P, which was less than the basic data allowance of 7GB in the existing network. With a service delivery cost of €0.002/MB, this model estimates the cost of various packages and thus indicates profit space. For example, the cost of a 10GB package is 0.002×1024×10=€20.48, €7.52 lower than its current price, which shows that this business model is profitable and well aligned with operations.

Synergy across the entire network

Fr o m d a y o n e , o p e r a t o r P w a s destined to be a leading domestic mobile broadband provider. While supplying content-rich data services at affordable prices is important in a climate of intense competition, successful operations entail more than suitable pricing and competing effectively with fixed broadband services. Subscriber experience and service quality have to be very good, which in turn necessitates the synergistic planning and configuration across the entire network. To satisfy E2E network quality requirements, all network interfaces should satisfy specific subscriber throughput requirements and absorb cumulative delays.

However, p lanning methods for

configurations to fine-tune operations and elevate QoE. As a result, enhanced resource utilization now targets subscriber segments as required, has raised overall QoS, and guaranteed high priority subscriber groups appropriate levels of service. Thus, operator P’s operations have become more coherent, systematic and efficient, which has boosted its brand equity in the market.

Along with the continuous increase of traffic and network loads, more and more reliability and security problems had been exposed in operator P’s network. Based on the trend of traffic growth and forecast of risk points, the joint team also formulated a flexible pool networking solution for operator P’s network. The solution dynamically satisfies operator P’s requirements on network reliability through avert ing network r isks at a reasonable network cost.

Future synergies

After months of cooperative efforts, the joint team had clearly understood the traffic distribution, subscriber behavior characteristics and other operation patterns of operator P’s network, and provided guidance to mobile broadband services of the operator through synergy between the network and business development and among the entire network. The joint team helped the operator support the rapid and strong growth of mobile broadband ser v ices , avoid network resource bottlenecks with reasonable network resources, and realize customized fine operation and network configuration to further improve subscriber satisfaction.

Huawei will continue to apply its expertise to future mobile broadband development and help realize operators’ network visualization, capacity matching, and network adjustment goals. Fine operations can be achieved by routine network early-warning systems that evade the network and operational risks posed by soaring broadband traffic volumes. Thus, synergy has emerged as the cornerstone of competitiveness in the fiercely contested mobile broadband market.

Fig. 1 Tariff package assessment mode based on network performance and costs

0 1 2 3 4 5 6 7 8 9 10 11

GB/Sub/Month5

15

10

20

25

30

35

40

0.002 €/MB

Incremental network cost €/Month

Mixed data allowance Basic data allowance

28

20.48

Editor: Li Xuefeng xuefengli@huawei.com

units and interfaces across the entire network vary based on different network characteristics. For example, the RAN relies heavily on wireless environments, its speed is inconsistent, and delays are unpredictable. Conversely, throughput in the core network is high, the network environment is stable, and delays are low.

Having fully assessed operator P’s network characteristics and problems in different layer, such as uneven service distribution and unstable traffic flow, the team focused on achieving synergy for traffic matching between interfaces and utilizing core network elements (NEs) across the entire network, and used active and passive KPIs to assess resources and network characteristics in different layer, thus to realize systemic risk analyses, resource re-allocation and configuration were conducted across the entire network.

To realize more specific fine tuning, the team monitored loads on key interfaces and NEs and estimated network capacity and NE usage. In combination with the analyses, service load forecasting, E2E network capacity adjustment and resources allocation were conducted, which eliminated the potential network bottlenecks and risk and finally improved the network performance.

Moreove r, s yne rg i s t i c p l ann ing principles were applied to the entire network and data mining provided the basis for QoS and QoE assessments. The joint team provided customized parameter

Synergies boost mobile broadband

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Huawei Communicate

By Chi Zhentao

Building cost effective mobile broadband networksMobile broadband services have seen increased traffic but the revenues have lagged behind. Operators need to adopt new strategies to build low-cost, high-performance mobile broadband networks.

y July 2007, over 150 million terminals had accessed HSPA-b a s e d m o b i l e b r o a d b a n d networks around the world. The

fast-growing mobile broadband usage has generated much more traffic yet stagnant or nearly stagnant revenues.

In the European market , mobi le broadband traffic has surged after 3G operators began offering flat rate packages with unlimited access. Analysis shows that if mobile broadband traffic grows by 50 to 100 times, revenues will only increase by 10 to 20% correspondingly.

Mobile broadband services are mainly based on Internet access with wireless data cards and mobile phones. These connections result in low-profit margins. With disappointing revenues, operators are reluctant to build and operate mobile broadband networks, which could negatively impact the industry chain.

It is becoming crucial to the bottom line for operators t o adop t n e w s t r a t e g i e s f o r b u i l d i n g l o w - c o s t , high-performance mobile broadband networks. This involves constructing a wireless broadband access network with sound coverage and smooth evolution capability, a low-cost backhaul, a highly efficient mobile packet core network, as well as a flexible bandwidth control mechanism.

Building a 2-layer mobile network

Mobile broadband data services can be divided into high-value and low-value. High-value services are those that can be deployed by operators who charge commissions, such as stock traders and payment services like PayPal. Low-value services are Internet services, particularly P2P services which consume a lot of bandwidth.

Current ly, 80% of da ta s e r v i ce s provided by mobile operators are low-value Internet services. Whether high-value or low-value services, they are delivered on mobile broadband networks with high mobility and QoS. The overall costs for

realizing these services are high.Operators are considering building

a 2-layer network to divert the traffic of different services and guarantee user experience. In this way, the costs for providing low-value services with the most traffic can be significantly reduced and overall operation costs can be significantly cut.

As shown in Fig. 1, layer 1 of a 2-layer network is a traditional mobile network for carrying high-value services and providing full mobility, QoS and billing support. Layer 2 is a low-cost mobile network for carrying low-value services and providing inferior mobility, QoS and billing support.

The core idea for 2-layer networks is to divert the traffic of low-value services from that of high-value services. Different

Fig. 1 2-layer mobile network

Node B

Layer 1: Network for high-value services

Layer 2: Network for low-value services

Internet

RNC

BackboneBackhaulHigh-value services

Backhaul+Backbone

SGSN GGSN VAS

Wi-FiLow-value services

B

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diversion points can be selected in actual deployment.

First, diversion takes place on the terminal side. At hotspots with high data traffic, more and more operators are using Wi-Fi networks to divert traffic generated by low-value services due to tight resources and reduce costs for expanding traditional mobile networks.

Traffic generated by terminals supporting Wi-Fi is carried by Wi-Fi networks instead of the traditional mobile networks. Actual deployment is not without its challenges such as: integrating Wi-Fi networks and mobile networks with minimum impact on user experience and resolving difficulties in Wi-Fi network planning and maintenance.

Second, traffic is diverted on the network side. Diversion may be realized at Node Bs, RNCs, or between RNCs and SGSN. Traffic that has been diverted will not go through subsequent nodes of traditional mobile networks, thus eliminating the costs for expanding the nodes. Different points of diversion may lead to different cost reductions but also difficulties in deployment and varied impact on user experience.

Compared with diversion at RNCs, divers ion at Node Bs saves more in network expansion costs, but provides no mobility across Node Bs. Operators should consider current network conditions, cost reduction targets and user experience to decide on which point to diverge traffic.

Reducing backhaul costs

Backhauls are the most important part of mobile broadband networks. With the development and evolution of mobile broadband to HSPA and LTE, an increasing number of base stations are delivering higher bandwidth and expanded mobile backhauls, but costs are higher.

Currently, the major target of mobile backhaul solut ions i s to reduce the transmission cost per bit to address traffic growth. Mobile backhauls using optical cables, microwaves and copper cables represent different evolutionary trends, and some new technologies are being considered for introduction to mobile backhauls for their outstanding cost effectiveness.

Mobile backhauls using optical cables

feature the lowest transmission cost per bit. For integrated operators, it is the best choice to build mobile backhauls with the existing optical cables. Mobile backhauls, which use PTN and can sufficiently support the evolution of mobile broadband to All-IP, will be a major option.

Moreover, GPON and EPON allow multiple links to share the resources (optical cables) of the same physical layer and will be an option for mobile backhauls. In MANs, FMC allows integrated operators to use the same metro bearer network for both fixed and mobile services and dramatically cut operating costs.

Mobile backhauls using microwaves feature fast deployment and low costs. Currently, about 60% of base stations worldwide use microwaves for backhauling. Microwave-based mobile backhauls use packet technologies to improve bandwidth usage. Also, self-adaptive cross polarization interference cancellation (XPIC) is used to improve spectrum efficiencies and increase the throughput. New bands like E-Band are used to realize throughput of over 1G for high broadband microwave mobile backhauls.

Be c a u s e c o p p e r o r t w i s t e d p a i r cab le s have been wide ly dep loyed , mobile backhauls using such cables are also a typical trend. Through multi-link bundling, a number of DSLs are bundled to satisfy LTE requirements for the bandwidth of mobile backhauls. For example, five pairs of VDSL2 twisted pair cables can provide a high-speed virtual channel of 0.5G. Though copper cables cannot substitute for optical cables, they can be used as a supplement to an integrated mobile backhaul solution.

If there are no opt ica l or copper cables in mobile backhauls, operators can consider using wireless resources, such as WiMAX and a self-backhaul, to reduce transmission costs. A wireless self-backhaul has such advantages as non-line-of-sight (NLOS) transmission and quick deployment. This is a creative and efficient way to build mobile backhauls. For example, idle TDD bands can be used for the backhaul of small base stations.

Moreover, operators are deploying diverted transmission on the existing networks. xDSL or FE interfaces are added to Node Bs to divert data of HSDPA and HSUPA, while

traditional voice and high-quality services are still carried on E1 links. For example, with this strategy France Telecom is implementing diverted transmission for its mobile backhauls on its several local 3G networks.

Controlling bandwidth flexibly

Another approach to resolving increasing traffic issues and stagnant revenues from broadband services is to apply flexible bandwidth control to divert resources to high-value services and users. Operating costs are reduced through the efficient use of resources.

The approach involves: first, shifting resources to high-value services and users to ensure the QoE for most users on the network; second, balancing the usage of network resources during peak and idle hours; and third, guaranteeing an appropriate level of QoS based on user behaviors and service features.

For flat rate subscribers, for example, P2P services are low-value and consume a lot of network resources, and thus should be appropriately controlled.

The approach above relies on flexible bandwidth control mechanisms. Currently, 3GPP has defined the policy and charging control (PCC) as the bandwidth control architecture. This architecture is being recognized by more and more operators, including Vodafone, Telefonica and T-Mobile.

If a mobile network is likened to an expressway, it is an unmanaged freeway before the introduction of the PCC and the actual throughput may be far smaller than the effective throughput. After the introduction of the PCC, the expressway is now efficiently divided into fast and slow lanes with speed limits and regulations and the tolls are being collected.

The introduction of this particular flexible broadband control mechanism allows dynamic control over the service type, user location, cumulative traffic, busy and idle hours and network load. It also introduces intelligent management for effective use of resources and reduces costs for expanding mobile broadband networks pressured by increased traffic.Editor: Liu Zhonglin liuzhonglin@huawei.com

Building cost effective mobile broadband networks

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Challenges of wireless interference

l l o f t h e s i g n a l s e m i t t e d by a wi re l e s s network are interference to another and this is particularly true when the

networks use adjacent frequencies. This kind of interference will affect the quality of networks, impair user experience and

Mitigating interference between LTE and 2G/3G networksRadio interference is one of the key factors affecting the quality of wireless networks. As wireless communications technologies have developed, networks of different frequency bands and standards operating in the same region have become commonplace. Interference between wireless networks has grown more troublesome. When operators start to deploy LTE networks, how can operators address the more complex type of interference between wireless networks?

By Sun Jingfei

even cause network failures in extreme circumstances.

Currently, many operators are trying to cope with interference between their own 2G and 3G networks. The frequency bands used by some 2G networks often overlap those of other 2G networks and 3G networks.

For example, the CDMA downlink frequency band partially overlaps the uplink frequency band for Extended GSM

(EGSM), causing marked interference. Many operators use 900MHz for UMTS, but the frequency bands of GSM900 and UMTS900 are close to each other, as those of GSM1900 and UMTS1900, and interference is inevitable in such situation.

In the near future, most operators in the world will face a more complex situation with 2G, 3G and LTE networks coexisting.

LTE has many spec t ra l opt ions .

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SolutionMitigating interference between LTE and 2G/3G networks

and co-channels are also among the typical scenarios that cause interference.

Co-site interference

Operators have invested heavily in 2G, 3G and LTE networks. Costs can be considerably reduced if it is possible to utilize the resources of existing 2G and 3G networks by sharing sites with the LTE network. In this scenario, the most pressing problem for operators is to combat co-site interference.

Solutions have matured, like the co-site adjacent channel interference solution. Take UMTS and GSM for example. The bandwidth assigned to UMTS and GSM are standard-compliant and also adjacent. UMTS is given the 5MHz, while GSM is given the 200KHz band. In this case, no guard band is provided, but interference is controllable and network performance is not affected.

In a co-site adjacent channel construction of UMTS900 and GSM900 networks, because the spectrum resources are limited, a solution with an operator bandwidth of 4.2MHz can be used by UMTS900, to ensure the capability and quality of GSM networks. The decreased bandwidth of a guard band can increase available frequency bands to GSM900 and the performance loss due to interference is acceptable.

60% of operators in Europe use 12.5MHz for the 900MHz frequency band, while 50% of operators in the Asia-Pacific region use 6–10MHz for the 900MHz frequency band. In this case, if a 3G network uses a frequency band for a 2G network, the 3G network can use a bandwidth smaller than the standard one, while ensuring the capacity and quality

Frequency bands specified for LTE include 700MHz, 900MHz, 1800MHz, 2100MHz and 2600MHz. These frequency bands are very close to those of existing 2G and 3G networks and some even partially overlap those of 2G and 3G networks. As a result, radio interference inevitably exists between 2G, 3G and LTE networks. Along with the rapid growth of wireless communications, spectrums have become increasingly scarce. More and more spectrums will be refarmed, causing greater co-channel and adjacent channel interference between wireless networks.

Interference between wireless networks has become a prime concern for operators and equipment suppliers. Many large companies are currently researching the issue and solutions are evolving.

Solutions for typical scenarios

When a new LTE network is built, it is necessary to analyze the current use of frequency bands in 2G and 3G networks. The analysis is intended to give early warnings to possible interference scenarios and help formulate preventive measures. If there are interference risks, the most direct mitigation measure is to reserve a guard band between two wireless communication networks. This can minimize interference, but it may also waste frequency resources. The actual width of a guard band depends on the anti-interference capability of equipment and the amount of interference from existing networks.

Filters and spatial isolation are needed in some extreme situations. For example, the CDMA850 frequency band already interferes with that of EGSM880, but LTE requires EGSM880. Co-sites

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of the 2G network. Along with network evolution, the method for controlling co-site interference between GSM and UMTS can also be used in the co-site construction for GSM, UMTS and LTE networks to control interference between the three.

Co-channel interference

Geographical i solat ion zones can be used to counter interference where different wireless networks use the same frequency bands. For example, after the frequency band of GSM900 is refarmed to UMTS900 in rural areas, the same spectrum is used by UMTS900 in rural areas and GSM900 in urban areas, causing a great deal of interference. It is possible to have an isolation zone using another frequency between the two areas. GSM900 networks in urban areas can then gradually evolve to UMTS900 or LTE in the future.

To improve 3G coverage in rural areas, Optus in Australia has refarmed part of the GSM900 frequency band to UMTS900. Compared with 2100MHz, the 900MHz frequency band has many inherent advantages, such as better indoor coverage, and double the coverage of 2100MHz. The 900MHz frequency band can notably reduce the number of base stations, facilitating network construction and development.

Because UMTS900 networks deployed in rural areas will strongly interfere with

GSM900 networks in rural areas, isolation zones are set up between GSM900 and UMTS900 networks. With this approach t o b u i l d i n g U M TS 9 0 0 n e t w o r k s , performance is guaranteed and interference control led. After implementat ion, operators can not only streamline their operations but also gain an advantageous strategic position.

Experience in 3G deployment can be used to deploy LTE networks beginning with hotspots. In the future, subscribers using GSM900 networks in urban areas will gradually decrease or turn to other networks, so the GSM900 frequency band can be retained for LTE. The existing anti-interference solutions are inherited and existing investment is protected.

Other interference

There are still many other complex scenarios involving interference. Take the new UMTS2100 network at Vivo in Brazil for example. The network was found being affected by existing networks such as GSM1900, CDMA1900 and DECT1900. After analysis, the interference problem was resolved with five customized filters.

When Vietnam’s HT Mobile swapped its CDMA800 network to EGSM, the uplink frequency of EGSM was adjacent to the downlink frequency of CDMA800 of other operators. To eliminate the interference between the two types of

networks, HT Mobile used filters in some places after analyzing frequency assignment.

In the proposed UMTS850 (refarming o f t h e A M P S s p e c t r u m ) n e t w o r k construction, Thailand’s DTAC realized that the downlink frequency was adjacent to the uplink frequency of the existing GSM900 network. The interference between the two networks was then effectively eliminated with corresponding solutions.

LTE network building will create more complex interference problems in the future. Huawei has conducted in-depth research and gained rich experience in eliminating interference caused by the coexistence of 2G, 3G and LTE networks, and the co-channel and adjacent-channel interference between wireless networks. Huawei provides optimal anti-interference solutions through spatia l i solat ion, equipment isolation, guard bands and other approaches.

Inter ference has long been a key concern for both operators and equipment suppliers. Fortunately, when 2G, 3G and LTE networks coexist in the future there are viable solutions to eliminate interference. To save money and maximize benefits during the construction of LTE networks, it is highly important for operators to tailor optimal solutions for all issues and potentialities from the very beginning.

Editor: Wang Hongjun whjun@huawei.com

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If there are interference risks, the most direct mitigation measure is to reserve a guard band between two wireless communication networks. This can minimize interference, but it may also waste frequency resources. The actual width of a guard band depends on the anti-interference capability of equipment and the amount of interference from existing networks.

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Solution

lobalization and informatization coup led wi th unba lanced development in international telecom markets have both

challenged and opened up markets around the world. The trend continues with many powerful operators expanding through multinational operations.

Multinational operators focus on markets and use capital through mergers to consolidate their global or regional leadership. They also control and utilize network resources in a centralized manner to offer nonreplicable core technologies and business models, while improving customer loyalty, reducing costs and increasing profits.

However, expansion and multinational operation is not without risk and it is a wise move for operators to improve their odds and quickly build up their overall competitive edge.

Bridging multinational operationsBy Lin Peixing & Li Rong

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Bridging multinational operations

Growing painsThere are four major obstacles to

succes s fu l ly break ing into the f a s t developing multinational telecom markets and grabbing some of the gold.

How to capture international roaming revenues?

A large number of subscribers use roaming service between countries and particularly between different regions within a country. Many tourists use it as well and international traffic revenues are increasing rapidly. According to TeleGeography, operator revenue from international traffic has steadily increased for the last 5 years and should continue to do so, and 2007 alone saw the wholesale and retail revenue reaching 11.5 billion USD and 78 billion USD respectively. Wholesale international

traffic accounted for 56% of the total traffic around the world, increasing nearly 10% compared to 2004.

Revenues f rom the internat ional roaming market have also witnessed rapid growth. According to reports from 3G Americas and Informa Telecoms, revenues from international roaming services reached 2 billion USD in 2008 in Latin America. The revenues in the first half of 2009 exceeded those of the same period of 2008 despite the economic downturn.

The lucrative international traffic and roaming markets have attracted a lot of VoIP and IT service providers like Skype and Google Voice, which offer cheap and even free roaming services. Facing promising markets with strong competition, multinational operators have to seriously consider the costs of service provision.

The growth of international traffic increases the requirements for interconnection between

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multinational service platforms which help operators provide services under a unified brand.

Second, multinational long-distance core networks can enhance the bargaining power of operators, who can consolidate the international traffic of all operating companies for lower interconnection prices with other international long-distance operators.

These prices will be far lower than those obtained by the operating companies a lone. With unif ied core networks, multinational operators can select low-pr ice routes to save cost s based on commitments (such as QoS) to end users.

Third, with unified multinational long-distance core networks, operators can collect information on international roaming users, analyze their consumption patterns and offer tailored service packages. This approach can not only effectively reduce the expense of roaming users, but also keep international traffic in the operator’s network.

When constructing multinational long-distance core networks, operators need to focus on the following issues: network architecture that meets IP trends; high network reliability, security, operability, manageability and maintainability; simple and clear settlement between operating companies; optimized routing options for interconnection with networks of other international long-distance operators.

American Movil started constructing the Long-Distance International (LDI) network for 15 sub-networks in Latin America and Miami in 2009. This was the first multinational long-distance core network in the industry. Tier-1 operators such as Vodafone, Telefonica and Zain also plan to construct multinational long-distance core networks in 2010.

Unified IP bearer networks

The greatest advantages of IP bearer networks lie in low costs, high bandwidth, easy deployment and easy maintenance. In multinational operations, unified IP bearer networks can effectively reduce network construction costs. Multinational long-distance bearer networks carry services, including international long-distance voice and Internet traffic. The points below should be considered when constructing

Different service platforms stand alone to the detriment of the multinational brand and user loyalty.

To be succe s s fu l , mu l t ina t iona l operators need to build unified service platforms, shorten the provisioning of new services, maintain technical leadership and establish a competitive edge with differentiated services.

How to build an edge in MNC ICT market ?

Increas ingly more mult inat ional companies are emerging and expanding, bringing a stronger demand for ICT. In add i t i on to t e l e com ope r a to r s , IBM and other professional IT service companies also are competing to provide profitable ICT services for multinational companies in the fast growing markets. For multinational operators, the greatest challenge is to prevent their networks from becoming low-value pipelines, through which professional IT service companies get the bulk of service profits.

ICT services for multinational companies pose extremely high requirements for the comprehensive capabilities of service providers. Providers not only need to provide these valuable customers with unified network platforms but also develop more abundant, professional and secure services based on the networks. How can multinational operators provide better services by effectively using the networks covering various regions?

Unification is the key

Multinational operators can construct unified core networks, IP bearer networks, unified network management systems (NMSs) and open service platforms to smooth the bumpy information highway.

Unified core networks

To satisfy the growing multinational traffic, one recommendation is that operators deploy unified core networks across multiple countries to effectively reduce roaming costs and optimize routing options.

First, multinational long-distance core networks make it possible to build unified

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the sub-networks of multinational operators and the networks of other long-distance operators. Interconnection costs are high. If multinational operators can consolidate the international traffic of all sub-networks and interconnect their networks with those of other long-distance operators, their bargaining power is greater and costs are reduced.

Multinational operators usually have various international routes available to wholesale their international traffic and different international routes feature different prices and voice quality. The trick is to get the best voice quality w i th the lowes t co s t in te rna t iona l routing. Operators can then attract the international traffic of local operators to achieve growth in both the international traffic wholesale and retail markets.

Besides, inter-network settlement can be minimized only when roaming traffic is kept in the sub-networks of multinational operators to the greatest possible extent. This way, service costs can be effectively reduced and the profitable roaming services are not transferred.

How to reduce TCO through centralized management?

The early sub-networks of multinational operators usually lacked unified planning and construction. The diversified technologies and complex structures were not scalable enough, and there were difficulties in interconnecting and interworking. This resulted in higher operational costs and it became obvious that network structures needed optimization. Therefore, unified network deployment policies and sub-network construction standards are needed to help perform system planning, reduce the TCO, and construct secure, efficient and centrally managed networks.

How to provide convergent brand and user experience?

Many sub-networks of multinational operators are obtained through merger and acquisition. These sub-networks have different service platforms and a long period of service launch. Although various services are available, no unified and distinctive brands are provided, so there is no unified customer experience.

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Solution

multinational long-distance bearer networks.Division of planes and layers: Two

planes are logically defined, with one for real-time services, such as voice calls and VPN and the other for non-real-time Internet services. The two planes work in the active/standby mode to ensure uninterrupted services. Two layers are used to strengthen the network scalability and minimize impacts on service networks (for example, definition of faults, capacity expansion, and upgrade). The entire IP bearer network is divided into the service access layer and the IP backbone layer.

Logical and physical topology: The logical topology of the IP backbone is set according to actual physical transmission links, including the access router, border router and core router. Access routers are usually customer edge (CE) routers and should be set as close as possible to service nodes such as the MGW, SoftX, SG, HLR, RNC, SGSN and GGSN. Border routers are usually provider edge (PE) routers between access routers and core routers. They are convergence points of access routers and are responsible for establishing the VPN channels of bearer networks. Core routers are usually provider routers, which are regional switch centers. Core routers are placed based on transmission resources between major cities.

Unified NMSs

Multinational networks involve a wide range of network elements (NEs). Unified NMSs will help improve the O&M efficiency. A unified NMS enables multinational operators to easily locate faults. Once a fault occurs or the voice QoS is lower than the expected level, an early warning will be generated so that the operator can quickly identify the impact and location of the fault. This reduces or avoids costs due to internal coordination between different O&M teams such as the core network O&M team and the IP network O&M team.

Besides NEs such as the softswitch, MGW, and SBC in the core network, CE routers for voice access can also be managed by the unified core network NMS. This reduces internal coordination costs for locating voice faults on IP networks and improves the O&M efficiency.

For a unified NMS covering dozens of countries, the multinational O&M solution should support role and domain based management.

For example, the O&M team at the headquarters of a multinational operator can configure, manage and monitor all network NEs, while the sub-network maintenance personnel maintain only the NEs of their sub-networks. A role can be assigned by the system administrator for operations on the NEs of other sub-networks. For example: queries for network topology and the NE configuration.

Multinational operators also need unified NMSs to quickly and conveniently ge t ne twork opera t ion condi t ions , including information about overall network operation, such as BHCA, ERL and call completion ratio; NE information such as CPU usage, memory usage, BHCA and ERL; link information like voice quality; as well as multinational statistical reports showing traffic between sub-networks, between sub-networks and networks of long-distance operators, and between regions and enterprises.

This requires the NMSs to have rich statistical functionality for monitoring the entire network. By monitoring the entire network or NEs, the NMSs allow multinational operators to take necessary steps lest performance indices such as BHCA, ERL and voice quality deteriorate. Measures like call restriction and adjustment of international traffic routes can be implemented to ensure proper network operation and guaranteed revenues.

Unified service delivery platform

Service delivery platforms (SDPs) help operators set up Internet and mobile content oriented platforms that quickly introduce, deploy and innovate services; build open, collaborative and controllable environments for content convergence, distribution and marketing; and support value chain integration and the service/business model transformation required by operators for industrial convergence.

The SDP has been recognized by the industry as a powerful tool for providing differentiated services for “one-stop shopping” by users. Practices show that

the SDP can shorten the period of service innovation from 5–12 months to 5–8 weeks, significantly reducing creation and operational costs for services.

American Movil has set up a unified open SDP as a part of i ts ef forts to integrate the regional operations of 17 sub-networks in Latin America. The platform integrates network devices, post-paid and prepaid systems from various vendors for SPs, multinational companies and large Internet companies to provide value-added services like: instant messaging, Ovi store, and open market to millions of subscribers in Latin America.

Unified communications

Operators wishing to compete in the ICT service market for multinational companies must have strengths in network infrastructure, operational experience, professional services and branding. Operators can start with unified communications (UC) for multinational companies that require frequent internal communications to save costs, make communication more efficient and meet their needs for UC that integrates data, voice and video.

Huawei’s eSpace enables PC portals to synchronize with users’ mobile phone numbers. It provides IM, VoIP and instant conferencing, plus realizes the same SMS and MMS functions as mobile phones. With the plug-ins, eSpace integrates enterprise BBS, enterprise search and other frequently used office information services. Enterprises are better served with improved employee efficiency and reduced costs while customer loyalty is enhanced, traffic increases and the ARPU of enterprise users goes up.

When pre-instal led, eSpace helps to p romote s eamle s s and cons tant communications by combining 3G data cards, the Wi-Fi function integrated through USB dongles and the roaming features of the IMS.

Since eSpace enables mobile phones and PC clients to use the same numbers, multinational operators can develop various bundled value-added services for enterprise customers and attract high-end customers to strengthen their competitiveness in the enterprise markets.

Editor: Xue Hua xuehua@huawei.com

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Bridging multinational operations

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