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FEB 2010 ISSUE
Internet of Things
and its future
To France Telecom,
LTE means a new horizon
Get ready for
900MHz refarmi
Telecom industry trends
in the next decade
The LTE dreamis coming true
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Sponsor:
Huawei COMMUNICATE
Editorial Board,
Huawei Technologies Co., Ltd.
Consultants:
Hu Houkun, Xu Zhijun, Xu WenweiDing Yun, Wan Biao, Zheng Chunhua
Liu Dongfang, Zhang Hongxi
Editor-in-Chief:
Gao Xianrui ([email protected])
Editors:
Xu Peng, Xue Hua, Li Xuefeng, Xu Ping, Yao Haifei
Huang Zhuojian, Fan Ruijuan, Chen Yuhong, Pan Tao
Zhu Wenli, Long Ji, Wang Hongjun, Liu Zhonglin
Zhou Shumin, Mike Bossick, Gary Maidment
Contributors:
Hou Jinlong, Zhu Yonggang, Shao Yang, Cai Mengbo
Cui Jinglong, Lu Xingang, Xiong Wei, Yan JunDu Yeqing, Lv Xiaofeng, Wu Hui, Lei Yanping
Zhou Jianhua, Zhao Yuan, Liu Qingliang
E-mail: [email protected]
Tel: +86 755 28356172, 28356173Fax: +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. 2010.
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.
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Is the cold economic winter o 2009 giving way to a more colorul springin 2010? Battling against sluggish subscriber growth, declining ARPUs, andstagnant revenues, operators are looking at LE to cast a ray o sunlightacross the telecom ecosystem and catalyze its uture growth.
Conventional network construction has strangled the proit potentialo mobile broadband with prohibitively high deployment costs and
subsequent prices. o curtail costs, operators have no choice but to boostspectrum eiciency, simpliy network architecture, and optimize basestation and O&M e ciency. New air interace technology and streamlinednetwork architecture must minimize per bit costs and transer delays.Equally, seamless coverage, roaming capabilities, guaranteed security, and
multi-standard interoperability complete the complex set o ingredients
necessary to nourish uture IC. LE can realize these ambitious goals, andis making its play as the premier next generation mobile communicationtechnology.
he rapid growth o mobile broadband has accelerated LEcommercialization. In December 2009, Huawei helped eliaSonera to
launch the worlds rst commercial LE network in Oslo. Achieving speedso 96Mbps and a maximum rate o 100Mbps, this global milestone innetwork development is a staggering 10 times aster than 3G networks.
Tough LE is coming out o the shadows, its large-scale commercialdeployment is still raught with obstacles. he heavy investment already
injected into 3G is encouraging many operators to either retain 3G as theirarea o ocus while balancing evolution to LE, or enhance 3G coverage
with 4G as a supplement. Given this, the optimum choice is networkconvergence.
SingleRAN has evolved to meet market demands and is already widely
employed across the globe. With its integrated design, SingleRAN canaccommodate dierent wireless standards and enable smooth utureevolution. It poses minimum risk as an investment choice and reducesoverall network deployment and maintenance costs, especially during initialLE construction. As a result, several operators, including eliasonera,
elenor, Belgacom, and Net4Mobility, have partnered with Huawei todeploy LE.
By the end o 2009, over 50 operators in 30 countries had established
LE commercialization schedules, shining some welcome sunlight on thetelecom ecosystem.
LTE on the fast track
Wan Biao
President of Huawei
Wireless Product Line
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Whats inside:
P.11 P.16
02 Huawei to construct railwaycommunication network in Australia by
GSM-R system
News
01 Singapores M1 chooses Huawei toprovide ATCA-based IMS solution
23 Internet of Things and its futureBy Xing Zhihao & Zhong Yongfeng
06 How can operators maximize themobile broadband opportunity?
By Thomas Wehmeier from Informa
03 To France Telecom, LTE means anew horizonHow should mobile operators take on the dauntingchallenge rom the massive surge in mobile datatrac on their networks? Philippe Lucas, Senior VP
International Standards & Industry Relationships,France elecom, gave us the answer.
By Philippe Lucas from FT
Experts Forum
20 Cloud computing: a world-changingpower
With breakthroughs made in relevant service andbusiness models, cloud computing will inevitablyexpand its role as a backbone or I services. As arevolutionary concept, its technological realization isset to change the way people work and live.
By Dr. Fang Binxing
Main Topic
17 Telecom industry trends in thenext decade
Cover Story
11 LTE is nowOn December 14, 2009, eliaSonera announced thatthe worlds rst commercial LE network was ociallyup and running in Norway. Tis network represents amilestone in realizing the LE dream.
By Yan Yun & Zhao Yuan
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P.28P.31
Lets COMMUNICATEbeyond 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 Visualized IP network O&MAn IP network needs to be measurable withvisualized operations and maintenance (O&M) orsound management and critical improvements.
By Wang Libin
33 Make the best of WiMAX forbroadband
By Qi Rui
39 Precision network planning forgreen mobile networks
By Yang Bo
41 Cooperative developmentstrategy of 3G and WiMAXDeveloping 3G and 4G networks such as WiMAX
cooperativelycan improve network resourceallocation, boost wireless broadband networkpopularization and give users a superior experience.
By Li Guodong
43 GSM-R: keeping communicationson track
By Wang Zhoujie
36 Get ready for 900MHz refarming
900MHz rearming solutions based on HuaweisSingleRAN let operators use the GSM requency toquickly deploy a low-cost UMS network with widecoverage. Users get seamless 2G and 3G services
with two networks integrated on the same platorm.
By Li Chunlin
Solution
27 Huawei, the front-runner in the 4Garena
By Qiu Huihui
Media Insight
28 PLAY my own wayMr. Hans Cronberg, CO o PLAY, shares theundamental success actor or start-up operatorsduring the interview with COMMUNICATEnevertry to copy what the existing players have done inthe market, but try to nd the new and eectivesolution.
By Joyce Fan
How to Operate
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News
FEB 2010 . ISSUE 541
Huawei demonstrates delivery of voice calling, high
definition video via LTE for Cox Communications
PLANO, Texas, 26 January, 2010,
Huawei announced the successful
completion of voice calling and
high denition video streaming over
wireless networks using Long Term
Evolution (LTE) technology for Cox
Communications, the third-largest
cable provider in the United States.
Cox's 4G technology and service
trials utilized the AWS and 700MHz
spectrum that it acquired in Federal
Communication Commission auctions
in 2006 and 2008.
" O u r c o l l a b o r a t i o n w i t h
Huawei has enabled us to achievemonumental strides in the trial,"
said Stephen Bye, Cox's Vice
President of wireless. "Huawei's
dedicat ion and support , the
understanding of our requirements
and ability to meet our aggressive
project milestones were key factors
in selecting them as a partner for
the trials. We are encouraged by
the success of the trials, which
further validate our decision to
pursue 4G based on LTE, specically
the 3GPP Release 8 standard."
"Huawei is the industry leader
on LTE technology and is already
deploying LTE networks for several
operators globally," said Wan Biao,
President of Wireless Product Line,
Huawei. "As we continue building
on the North America LTE eld trialsstarted in 2008, this is another
milestone reecting our unwavering
commitment to helping operators
deliver advanced mobile broadband
services to their customers."
China Telecom launches CDMA2000 EV-DO Rev.B pre-
commercial network with Huaweis solution
Guangzhou, China, 21 January,
2010, Huawei announced that it has
successful delivered two CDMA2000
1x EV-DO Rev.B networks in Beijing
and Guangzhou for China Telecom.
Huawei's industry-leading EV-DO
Rev.B solution will enable operators
to improve capacity, throughput
and latency on their existing EV-DO
networks and offer sophisticated 3G
services to the subscribers of China
Telecom, including VoIP, voice on
demand, and streaming media.
The EV-DO Rev.B networks are the
fastest 3G networks to date in China,supporting downlink data rates of up
to 9.3Mbps per user. Based on 2.1GHz
and 800MHz dual-band, the EV-DO
Rev.B networks will be able to enhance
the carrying capacity to deal with the
explosion of data services and provide
stable and reliable high-speed mobile
broadband experiences for 3G users.
Zhao Ming, President of Huawei
CDMA Product Line said, "Huawei
is fully engaged with world leading
CDMA operators, including China
Telecom to drive CDMA's evolution and
commercial development. Establishing
two EV-DO Rev.B networks for China
Telecom in a short time demonstrates
Huawei's commitment to providing
our customers with innovative mobile
broadband services. "
As the leading CDMA end-to-endsolutions provider, Huawei released
the first commercial EV-DO Rev.B
solution at the fourth Global CDMA
Operation and Development Forum in
June 2009.
Singapores M1 chooses Huawei to provide ATCA-based IMS solution
Shenzhen, China, 25 January,
2010, Huawei announced thatMobileOne ("M1"), one of the
leading mobile communications
providers in Singapore, with
more than 1.7 million customers,
has selected Huawei as the sole
provider of an ATCA (Advanced
Telecommunications Computing
Architecture) platform based IMS
solution to enrich its national
broadband services and build its
FMC capabilities. This IMS solution
will allow M1 subscribers to enjoy
rich multi-media services such as
VoIP, IPTV, Centrex, and HD video
conferencing.
Leveraging Singapore's Next
Generation National Broadband
Network (NGNBN) initiative, M1
will offer both fixed and mobile
network services. The integration of
Huawei's IMS solution will enhance
M1's capabilities in an increasingly
converged world and enable M1 to
smoothly transform from a mobile
operator to a fixed and mobile
service provider.
"With Huawei's IMS system, M1
will build up an advanced future
oriented network architecture,
which gives us the capability to
deliver new multimedia services
to both our fixed and mobile
customers in the future," said Mr.
Patrick Scodeller, CTO of M1.
"Huawei's customized ATCA-
b a s e d I M S s o l u t i o n s a l l o w
operators to achieve rapid network
deployment and shorten time to
market and support M1's business
transformat ion by provid ing
subscribers with advanced multi-
media services," said Mr. Jin Huang,
Vice President of Core Network,
Huawei.
Huawe i ' s IMS vo i ce ove r
broadband (VoBB) solution adopted
a standard ATCA platform. One
ATCA frame is able to provide all of
M1's requirements. As a pioneer in
global IMS applications, Huawei's
IMS solution is being adopted to
enable rapid development and
delivery of differentiated IMS-
enabled services by leading operators
worldwide, including CLP Group
(Germany), EDF Group (France),
Telefonica, SFR (France), Cox
(USA), Etisalat, STC (Saudi Arabia),
Vimpelcom (Russia), Telmex (Mexico),
Telecom (Argentina), China Mobile,
China Telecom, TM (Malaysia), and
WIND (Italy).
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Huawei deploys new generation blade mobile
softswitch for Zain Nigeria
Shenzhen, China, 18 January, 2010,
Huawei and Zain Nigeria announced
the successful deployment of a next-
generation blade mobile softswitch in
Nigeria.
The deployment in Nigeria
represents a major milestone for Zain
as it meets the requirement from fast
growing customers and effectively
controls the TCO. The project can
help operator reduce the 60% of
equipment room and save about
65% power consumption.
Focused on "customer experience-
centered" management, the solution
can provide real-time monitoring,
fault location and automatic recovery
features to help Zain to build
the capability in intelligent All-IP
operation.
In addition, based on the MSC
Pool networking architecture,
Zain can quickly achieve network
resource sharing, guarantee the
services continuity, and improve
the system's reliability achieved up
to 99.9999%. In the future, the
network can evolve to IMS network
smoothly, which lowers operator's
CAPEX signicantly.
"Zain is always committed to
providing world-class experience
for its growing customer base by
continuously adopting leading
network technology. Huawei's new
generation blade mobile softswitch
solution meets our requirement
on All-IP network operation. The
excellent solution will help us
advance network efficiency, reduce
operation cost, and provide better
services to the rapidly growing
customer base" said Mr. Alain Sainte-
Marie, CEO of Zain Nigeria.
Huawei unveils worlds first backbone network synergy
planning solution
Shenzhen, China, 19 January,
2010, Huawei launched the world's
first synergy planning solution for
backbone networks. This solution,
which is backed by a multi-layer
network planning tool cal led
iManager MDS6600, enables synergy
between the IP and transport layers
of the backbone network, offering
highly efficient network resource
utilization, greater reliability, and
lower operations and maintenance
(OM) costs.
Enhanced network resource
ut i l izat ion is poss ib le due to
the solution's management of
bandwidth resources, which are
assigned based on traffic in a
unified manner, thus achieving
synergistic trafc processing across
the IP and transport layers. This
interaction between the IP layer and
transport layer eliminates repetitive
protection when an issue occurs,
reduces wasted resources, and
offers highly efficient protection
and enhanced network reliability.
Huawei's synergy solution also
provides high capacity and an ultra-
broadband backbone network for
operators.
"Huawei's innovative synergy
planning solution is the first in the
world to offer inter-layer traffic
synergy, protection synergy, and
management synergy, helping
operators to increase network
efciency, mitigate pressures on the
backbone network and optimize
network reliability, while slashing
OM costs," said Mr. Christian
Chua, President of the Converged
Backbone Solution in Huawei's
Network Product Line.
Huawei to construct railway communication network in Australia by GSM-R system
Shenzhen, China, 18 January, 2010,
Huawei announced its selection by
UGL Limited, Australia's largest rail
engineering company, to be the sole
supplier of technology and equipment
and deliver its GSM-R solution for
RailCorp's radio communications
upgrades to the metropolitan rail
network in New South Wales (NSW).UGL was awarded the tender
on the 21st December 2009, to
design, supply, install and maintain
a state-of-the-art digital train radio
system (DTRS) on NSW RailCorp's
electried rail network.
GSM-R technology is vital for
improving rail network safety,
offers value-added functions,and provides greater coverage
than analogue radio networks.
Huawei's GSM-R solution will link
all rail operations on the network,
providing an integrated voice
communications system optimising
train control, signaling, shunting,
trackside, as well as improving
communications between train
crews and transit ofcers.
"Huawei's GSM-R solutions
are recognised as state-of-the-art
wireless communications systems
that deliver safer, more advanced,
railway networks." said Peter Rossi,
CTO, Huawei Australia.
"Our international experience
and expertise wil l assist UGL
in providing seamless wireless
coverage across RailCorp's metro
n e t w o r k . W e w e l c o m e t h eopportunity to work with UGL and
RailCorp to improve the important
metropolitan rail network in NSW
to create a safer, smarter rail service
for people in NSW." Mr. Rossi said.
Huawei began researching
GSM-R technologies in 2001, and
has since become one of only a
few end-to-end GSM-R solution
suppliers in the world.
Huawei ' s GSM-R so lut ion
fully complies with European
Integrated Railway Radio Enhanced
Network (EIRENE) specifications
and r eq u i r ement s , and has
successfully passed Lloyd's product
certication.
I n A p r i l 2 0 0 9 , H u a w e i
successfully launched its GSM-R
communication system for the
Shijiazhuang-Taiyuan passengertransport railway, which can reach
speeds of up to 250km/h and
covers 189.93km throughout
China. The Shijiazhuang-Taiyuan
railway includes Asia's longest
tunnel, the 28km Taihang double-
tube tunnel. Huawei's GSM-R
solution solves coverage problems
experienced inside long tunnels.
"The challenges we came up
against in China can be applied to
the Australian environment. Long
tunnels, vast distances, and high
trafc areasall of these problems
were overcome using Huawei's
innovative GSM-R solutions," Mr.
Rossi said.
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To FranceTelecom, LTEmeans a
new horizon
How should mobile operators take on the daunting
challenge from the massive surge in mobile data
trafc on their networks? Philippe Lucas, Senior VP
International Standards & Industry Relationships,
France Telecom, gave us the answer.
By Philippe Lucas
Experts Forum
FEB 2010 . ISSUE 54
To France Telecom, LTE means a new horizon
3
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Huawei Communicate
Philippe Lucas is VP International Standards & Industry Relationships of the FT/Orange Group. Philippe is
also on the Executive Committee of the GSMA, the ETSI Board and the OMA Board. He was previously an
independent consultant on mobile strategy for government, operators and manufacturers.
LTE, part of our mobilebroadband strategy
he past ew years have seen adrastic increase in data traicon mobile networks. Coping
with this surge o data tra c is adaunting challenge that operators have totake on and overcome, while LE is poisedto be a solution that can provide the rightcapacity at reduced cost or networks.
A solid 3G inrastructure
France elecom Orange is now presentin 28 countries with around 130 millionmobile customers. In terms o broadbandpenetration, Orange had more than22% o its customers in 2008 using 3Gnetworks, and many o them are romemerging countries.
With the developments o our 3Gnetworks in the U.K., France, Spain,Poland, and the rest o Europe, we are ableto provide mobile services in most o thecountries by consistently using a singletechnology amily: GSM, EDGE, UMS,
HSPA, HSDPA, and HSUPA. he 3Gcoverage by population in our our majorcountries is: 75% or France, 94% or theU.K., 83% or Spain and 53% or Poland,he main technologies employed areHSDPA and HSUPA.
Upsurge o data traffi c
he low bandwidth available on datanetworks such as GPRS and EDGE makesit imperative or Orange to move to 3G.
o cope with the surging data traic, we can increase the network capacity, oroload the traic onto alternative radioaccess networks and Wi-Fi network whenavailable. In addition, we need the righthandsets available and make the best useo all spectrum resources, including thecurrent GSM and UMS bands, as well asnew bands such as UMS extension bandsand the digital dividend band.
Leading to LE/EPC
We are seeing the increase o datacapacity on both ixed and wirelessnetworks in parallel. On the xed or wire
line, broadband capacity is dedicated toeach line, whereas mobile broadbandcapacity is shared by all customers in thesame cell. Mobile broadband has beencontinuously advancing to cope with newusages, though always trailing behindxed broadband. When LE comes, it isexpected that mobile devices can reach thesame bandwidth as the xed line or ber.
In LE, we may operate in manydierent bands or channel carriers. Weneed to increase throughputs and reduce
the latency to 50ms or less. We also needto work on the convergence o dierentvoice and data services on one LEnetwork, while ensuring QoS with reducedOPEX. In addition, increased bandwidthrequires new backhaul and core networksor IP tra c.
From the market demand and technicalperspectives, all these elements point tothe conclusion that LE/EPC is the bestsolution to our issues or the answer to thenew requirements.
4
he turning point or data consumptionwas the arrival o the iPhone. Besides, wehave data cards that are generating muchtraic on data and service networks asmost o the data tra c is rom data cardson the PC side. Te tra c growth in our
our main European countries (France,the U.K., Spain, and Poland) had beenmultiplied by ive and hal in the singleyear o 2008. In France with a hugenumber o iPhones on networks, the datagrowth is ar higher.
Moreover, new HSPA devices andvideo-/Internet-based services on 3Gnetworks will attract immense traic tothe networks. For example, the OrangeV provided on French 3G networks hasderived huge tra c.
T
In LTE, we may operate in
many different bands orchannel carriers. We need
to increase throughputs
and reduce the latency to
50ms or less. We also need
to work on the convergence
of different voice and data
services on one LTE network,
while ensuring QoS withreduced OPEX.
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Experts Forum
FEB 2010 . ISSUE 54
LTE: benefits and challenges
LE is supported by the GSMA as the naturalevolution path or GSM/UMS operators, anddeclared by NGMN as the technology closest to its
objectives. Operators on the planet have selectedor committed to use LE, including many EVDOoperators like Verizon and KDDI. LE is set toextend the GSM/UMS world ootprint, resultingin greater economy o scale and wider roaming.
Advanced technology at reduced cost
Dierent rom 2G or 3G, LE has a fatter andsimpler architecture, which helps operators to reduceOPEX in the long run. Operating in packet-onlymode, LE comes with a new radio interace andachieves various carrier spacing ranging rom 1.4
to 20MHz and better eiciency (high throughputUL&DL, lower latency, higher cell capacity) than3G, providing tens o Mbps or a 20MHz channel.More important, it supports backward terminalcompatibility, enabling LE devices to use 2G or 3Gnetwork service.
As or CAPEX, LE provides fexibility or rolloutthanks to the allback on the HSPA layer. InitialLE rollout can ocus on dense areas, on existingsites (co-sited with 3G). Further rollout can bedriven by market demand. LE also leads to reducedOPEX thanks to sel-optimized network (SON) and
improved spectral eciency.
Not without its challenges
LEs development has challenges, especially romthe requency bands and voice side.
he spectrum usage in LE is s t i l l very complicated. In the U.S., Verizon is targeting at700MHz bands; China may adopt 2.3GHz, andEurope 2.6GHz. Te base station is not a big issue,but the devices can become one, especially withroaming. Despite a global technical standard, we donot have a global requency band. Tis will increase
the cost o devices, and the time or selecting theband when roaming in a given area will be extremelylong.
Voice on LE is a big challenge as the LEnetwork is packet switched only and the relevantstandard has not been optimized. When using LEor radio access but there is no voice provided byLE, customers have to switch back to 3G or 2Gnetworks, which increases delay. Delivering voice toLE customers is o great importance. With LE,VoIP is steered by IMS with eicient use o radioresources and services.
he rich communication suite (RCS) beingtrialed in France is very helpul to voice on IMS.
We are currently promoting the RCS on the existingnetworks with voice over circuit switch. When VoIPover IMS is proven to be the right technology, it willbe quite easy to combine voice and the RCS on IMS.
At the border o LE coverage, single radio VCC(SRVCC) will provide handover with 2G and 3Gcoverage by the same operator, enabling internationalroaming with 2G and 3G networks.
All LE mobile devices will be multimode butmaybe some USB dongles, thereore beneitingrom voice service on legacy networks. Provided thatLE handsets are available beore IMS deployment,there are interim solutions or technologies such asHSPA and HSDPA, which allow allback on the 3Gnetwork or voice, as standardized by 3GPP by usingCS allback (CSFB).
France Telecoms new horizon
We are operating in a mature European market with many countries where the mobile penetrationrate has surpassed 100%. With increasingly less 2Gand EDGE, we are gradually moving upward toincorporate LE capabilities, and extend in parallelour UMS coverage using the 900MHz band. As weare evaluating the possibility and timeline o LE,there are many actors to take into account.
LE spectrum allocations are expected to
come through in Europe by 2010. We plan tocommercially launch LE around 2012, mainlyin the mature markets under the Orange brand.However, we will rst ensure that the standards aremostly inalized; then we will start looking at thedigital dividend available.
Devices are a tricky issue. From the mass marketperspective, we will not be able to get massivedeployment o devices with voice capabilities as wehave today. In the meantime, boards and cards insidePCs or laptops will emerge at the initial phase odevelopment, to be ollowed by data centric devices.
Aterward, LE smartphones may come in 2012.As or network equipment readiness, vendorsmust ensure that things are moving well. At OrangeFrance, we are starting trialing LE in our labs inParis. We are expecting commercial progress in ourlaunching trial in Paris in the rst hal o 2010.
o conclude, although outstanding issues relatedto device, open interace, etc. remain, LE/EPC withits superior technological advantages is no doubta new horizon or mobile technology, and Franceelecom is committed to bringing it to reality.
Editor: Long Ji [email protected]
To France Telecom, LTE means a new horizon
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Huawei Communicate
6
How can operators maximize
the mobile broadband opportunity?
No one doubts that mobile
broadband is big business.
But how operators might
leverage the potential remains
unclear. Thomas Wehmeier,
a principal analyst from
Informa Telecoms & Media,
spoke to us about mobile
broadband opportunities and
shared Informas views on
how operators can maximize
gains from mobile broadbandbusiness.
Todays world
A period o transition
odays operating environmentis characterized by a period o
transition.he economy has orced
operators to nd new and innovative waysto drive cost out o their business to protecthard-earned margins.
Competition is as intense as ever. A prolieration o players in emergingmarkets has resulted in intensive pricecompet it ion. his compet it ion, incombination with regulatory requirements,is intensiying pressure on ARPU andrevenues. Operators are orced to develop
new strategies to mitigate churn and toincrease customer loyalty.elecoms and web convergence is a
well-developed concept. he threat tomobile operator revenues is no longerlimited to rival MNOs or ixed-linecounterparts.
Te challenge has expanded to includeInternet-based companies and other partso the telecoms value chain ocused on
winning share in the services arena. oappreciate the emergence o these new
competitors, think o Skypes success inVoIP, Googles entry into mapping, emailand IM, or Apples application store.
As we move into the mobile broadbandera, 2010 sees us reaching a crucial tippingpoint where global data traic carried
over mobile networks exceeds voicetrac or the rst time. Tis is creating aglobal connectivity opportunity o hugeproportions. Most signicantly, we believeit is the emerging markets that will seenew mobile broadband networks creatingunprecedented opportunities.
A connected world
It has been just over 30 years since Japans N DOCOMO launched theworlds irst commercial cellular mobile
phone network, on 1 December 1979. Teway the industry has progressed since thenis nothing short o remarkable.
Despite a slowdown in the rate ocustomer additions, the global mobilemarket still grew over 16% in terms onew connections in 2009. Asia alonereported more than 360 million newconnections in 2009, while the industry asa whole surpassed 4.5 billion connections
worldwide in October 2009.Mobile technology has simply become
Thomas Wehmeier is a principal analyst within Informa Telecoms & Medias Industry Research division.
His specialized interests lie in analyzing mobile operator strategies, in particular looking at the impact of
technological evolution from 2G through 3G to 4G from an operator perspective. Thomas also looks closely at
the impact of regulation on mobile operator business models.
By Thomas Wehmeier
T
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Experts Forum
FEB 2010 . ISSUE 54
Operators have been bullish in pushingand promoting this new source o revenue,not only by dedicating valuable retailspace to products such as netbooks andlaptops but also by aggressively subsidizingthe segment as they seek to attract newcustomers, retain high-value users andcarve out their own slice o what standsto be a nearly 40 billion USD annualbusiness in 2013.
Challenges andconsiderations for MBBdeployment
Next, we will speak candidly about
the types o challenges that lie ahead, theconsiderations this imposes on COs andthe strategies being adopted throughout
Asia to address the challenges.
Ready to support the exaood?
An exafood o trac is on the horizonas smar tphone usage and por tab lebroadband connections drive a surge indemand or bandwidth.
Although we see the growth o theportable broadband user base rom less
than 60 million in 2009 to about 300million in 2013, this revenue opportunitydoes not come without its own problems.
As users o portable broadband servicesprolierate, their average monthly usage
will grow equally quickly as they becomeamiliar with the value o broadbandon the go. he average data traicconsumption per month or portableusers is orecast to skyrocket rom 500MBin 2009 to 990MB in 2013. When wetake both the rising user numbers and
the growing average usage together, itsnot hard to see why we will be enteringthe era o the exalood. In 2013, totalannualized traic is orecast to reachmore than 8 exabytes, compared withless than 0.5 exabytes in 2009. For therecord, an exabyte is roughly equivalent to50,000 years o DVD-quality video. hesheer volume and cost o supporting thisupcoming data food is unparalleled. How
will networks prepare, and what are thereal challenges posed by this new era?
7
the most global, the most pervasive andthe most loved orm o technology everinvented.
Mobile broadband trends
and forecasts
All over the world, rom Arica to Asia, rom China to Chile, we have seeninvestment in and deployment o mobilebroadband networks. odays globaltelecoms arena consists o almost 400separate mobile broadband networks inoperation, truly creating a world unitedby a global tide o mobile broadbandconnectivity.
Mobile broadband growth into2013
In 2013, mobile broadband users willnumber more than 1.4 billion. Growth isbeing led today by North America, Europeand the more developed markets o Asia in
Japan and South Korea. Asias importanceto the global mobile broadband user base
will surge starting in 2011, when we expectto see present investments in 3G networksin China, India, Indonesia, Vietnam andmany others evolve into huge motors ogrowth or worldwide mobile broadbandusage.
HSPA will be the dominant globaltechnology or the next three year. We willsee more than 900 million HSPA usersaround the world in 2013more than two-thirds o all mobile broadband usersandclose to 350 million o these will live in
Asia.LE will come on stream rom 2010
onward. We expect to see the irst early-adopter launches in Asia, and in North
America and Europe, happening duringthe nal phases o 2010, but we also expecttake-up to be slow while deploymentsremain small in scope and the availabilityo appealing, mass-market devices islimited.
Mobile data is big and gettingbigger
We spend considerable time beratingourselves as an industry, ruing the act that
voice still accounts or more than 70% oglobal mobile service revenues. But whenyou remember that our industry is worthmore than 900 billion USD in operatorservice revenues alone, you realize even20% makes up a huge market. In 2008,mobile data generated 107 billion USDin revenues and P2P SMS generated 76billion USD. Combined they accountedor 23% o the overall industry revenue.
We orecast mobile data revenues,along with P2P SMS, will grow rom 184billion USD o 2008 to more than 330billion USD in 2013.
Portable segment emerges as akey new revenue stream
P2P SMS is unsurprisingly still thelargest data service, but newer revenuestreams are witnessing rapid expansion.odays astest-growing data service is theprovision o Internet connectivity throughnonhandset devices, such as USB modems,netbooks, embedded laptops and PCattachment deviceswhat we reer to asthe portable broadband segment. It hasalready emerged as an industry worth over10 billion USD.
I we take a look at the global datarevenues by application in 2009, we see
that broadband connectivity is the astest-growing data service globally or operators
with mobile broadband networks, and thethird most important source o nonvoicerevenue, with around 11 billion USDsecond to P2P SMSs 80 billion plus USDand the mobile Internets approximately67 billion USD in 2009. It accounts or5% o global data revenues and 9% onon-SMS data revenues.
Although traditional handset ormactors will ar outweigh them in terms
o volumes, nonhandset devices, such asdongles, will grow to become a sizablesegment. We estimate there to be 60million portable device users, with USBmodems as the dominant choice o ormactor.
In Asia we have already seen more than20 million users throughout the regiontake up primarily dongles. Asia accountsor about one-third o the global portablemarket, with the region orecast to grow tomore than 107 million by the end o 2013.
How can operators maximize the mobile broadband opportunity?
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8
The cost element drives
operators toward LTE,
network outsourcing and
sharing, converged controland transport layers and
SDR-based access networks,
while the service-value
element is why operators are
looking to intelligent packet
management and opening
up network APIs, such as
location, user metadata andreal-time delivery.
raffi c vs. revenue
Given the exalood o traic, thedata-traic growth stands to ar outstripits revenue upside. Inorma spent apainstaking six months in early 2008and then six more months in late 2009studying and quantiying this trendglobally. So although we see healthygrowth o 180% in data-service revenuesrom 2008 to 2013, that igure will bedwared by the growth in data traicrising to 17 times todays volumes.
Flat rate: one o the culprits
he revenue generated per megabytehas been driven to a raction o its ormerlevels by the advent o the lat-rate era.Inorma spoke with an Asian operatorthat had introduced HSPA to its networkin 3Q07, thereby helping push revenuesteadily upward, but in the past two yearsthe operator has also seen a 900-oldgrowth in tra c.
In the space o just nine quartersbetween 2Q07 and 2Q09, the averagerevenue per gigabyte or this operatorell rom over 5,600 USD to just 11USD. In megabyte terms, the operator isnow generating just 1 dollar on average.
Nothing more explicitly demonstrates howmobile broadband and the fat-rate modelare shaping a new world or networkoperators around the world and why wemust question the economics o todaysmobile broadband models.
New services generate lower value permegabyte
In 2009, Inorma calculated the averagerevenue per megabyte generated or mobilebroadband, P2P email and P2P SMS to be
0.05, 0.37 and 260.72 USD per megabyte,respectively.Newer s e r v i c e s su c h a s mob i l e
broadband generate much lower returnsthan traditional data services. Indeed,service value and traic volume havebecome very much decoupled in a fat-rate
world.Tis leaves operators acing a dual-edged
challenge: hey must develop chargingand pricing models to maximize revenueper megabit while working incessantly to
drive down production cost per megabyte.Te cost element drives operators towardLE, network outsourcing and sharing,converged control and transport layersand SDR-based access networks, while theservice-value element is why operators arelooking to intelligent packet management
and opening up network APIs, such aslocation, user metadata and real-timedelivery, to generate additional value romexisting service-delivery models.
Network pipes are going to be ull otra c rom these lower-revenue-generatingservices. When we look at the split oglobal data-traic origin by device type,traic rom higher-value handset-basedservices (1.25 USD per megabyte) will allas a proportion o overall network tra crom 40% in 2008 to around 16.5% in
2013, meaning the pipes become ull otraic (by portable devices at 0.05 USDper megabyte) and will generate aboutone-25th o the amount o revenue permegabyte rom other data sources. Averagerevenue per megabyte will all to 0.20USD and 0.01 USD or handset-baseddata services and portable device-based,respectively, in 2013.
Another dilemma: resourcemonopolization
As ever, the distribution o networkresources to users is ar rom balanced.
Another dilemma is imposed by themonopolization o the resources by a smallhard-core minority o userstypically5-10% o an operators customerswiththe eect that a raction o users drivesCAPEX requirements.
Some might say, well inewe nowknow that 95% o users must be highlyproitable, because they use up so littletra c. rue, perhaps, but the real challengeis that without active management, its thesmall group that drives busy-hour peakshigher and thereore skews provisioningrequirements and ultimately ends uporcing investments to ensure that networkquality doesnt suer.
he train o thought, within both theCO and CMO oices, is now rollingon toward the introduction o moreintelligent packet-management strategies,enabling them to develop models to cope
with the hard-core minority o bandwidth-hogging customers. COs need ways tohelp fatten peak bandwidth demands andoptimize utilization levels in order to keepsmall groups o users rom driving busyhour provisioning and thereore drivingCAPEX levels up.
How operators move into thisbrave new world
Bearing in mind the orecast explosivegrowth o the portable segment, its naturalto ask how operators are prepared to moveinto this brave new world.
Real strategies
o meet the exa lood head on ,throughout Asia we see multiple strategiesbeing deployed by operators to embrace
and address the tidal wave o traicanticipated or the region.Perhaps most high proi le i s the
movement toward next-generat ionnetwork deployments and the promiseo HSPA+ and LE helping drive downthe cost o production per megabyte andallowing operators to scale traic growthprotably. As ever, technology innovation
will be led rom Asia, and we expect to seeearly LE deployments in 2010 in Japan,ollowed by more commercial networks
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in China, Hong Kong and South Koreasometime around 2011. At least sixHSPA+ networks are already in service in
Asia, rom Hong Kong to Singapore toJapanincluding EMOBILE, StarHub andSotBank, just to name a ew.
But existing technologies also havea long l i et ime. Investment in thedensication and expansion o networks ishappening at an accelerated rate to meetusers capacity demands. I was particularlyinterested to note that KF in SouthKorea recently just lit not its second orthird but its ourth carrier or HSPA inSouth Korea. Capacity is being eaten up asquickly as its deployed.
Operators are being orced to examinesupplies o their basic raw materials too.
Spectrum is the lieblood o operatorsnetworks, and more innovative approachesto spectrum usage are demanded in thenew mobile broadband world. Tis meansopening up new bands, such as the digital-dividend band, 2.6GHz or 1.5GHz, and italso means more-intelligent use o existingbands.
raic oloading and indoor coverageare two other critical issues. How canoperators relieve pressure rom themacronetworks and get access points closerto their users to achieve more-e cient bit
rates? Femtocells and a multimode accessstrategy encompassing Wi-Fi are two coreoptions, and we see this being adoptedin Asia. N DOCOMO, StarHub andSotBank have all made announcementsregarding their emtocell plans.
Maximize todays mobile broadbandopportunity
So how do we believe operators canposition themselves to maximize todaysmobile broadband opportunity?
here must a ho l i s t i c network-deployment strategy to manage the moveinto this new paradigm without blowingprotability.
he irst is to ensure that networksare set up to cope. Investments toboost speeds are necessary to ensurenetwork competitiveness and to addressthe demands o bandwidth-intensiveapplications. Coverage too is critical.odays mobile broadband users expect toexploit networks anywhere and anytime.
Inside coverage in particular must beaddressed, given that 70% o traicoriginates within our walls.
Operators must also look to addintelligence into their cores. Intelligentshaping o traic will be a undamentalstrategy to help deliver optimum utilizationlevels, to help segment users eectively,to develop QoS-based services and to
introduce more fexible and real-time billingand payment propositions/platorms.
Te network and connectivity in itsel isnot just a service but an enabler. Operatorsare evolving their strategies to open uptheir networks so they can move intoan era o service enablement and servicedelivery or upstream third parties seekingto exploit their network assets.
Monetizing with an open
network strategyNetwork always at the core
Now lets ocus on monetizationstrategies or next-generation services andanalyze how an open network- and service-enablement strategy can orge a path tothe world beyond a dumb pipe.
In the developed arena in particular,operators are reaching a crossroadsrealquestions are being posed as to whether an
operators role should simply be limited toproviding fows o dataan access pipe andnothing more. his is based on doubt asto whether operators can develop, marketand generate prot rom their own set osuccessul services. Vodaone 360 has somepromise, but or every Vodaone 360 thereare a dozen ailed attempts by operatorsto create and monetize their own-brandedservices.
Te emergence o the application storeand other above-the-line services deliveredrom the Internet world has the potentialto cut out the operator entirelyto relegateit to being a dumb pipe.
An absolute cornerstone to understandingthis debate is the need to recognize thatthe network is, always has been and will
remain a key orm o dierentiation andinnovation or any mobile network operator.
Whatever doubts might be raised by networkoutsourcing or ubiquitous network coverage,dont think or a minute that the networkno longer plays a role in an operators corestrategy. Whats more, the network whenacting as a smart or intelligent pipe can alsobe a high-margin servicesomething echoedby -Mobile USAs and Vodaones CEOs.
In act, its not unreasonable to say thatin todays new world, the most importantthing to control is not the customer but
the network.Once understood, this mindset becomes
a key driver to opening up networks, andunderstanding it can not only provideservices directly to consumers but also actas an enabling platorm or an unlimitedlong tail o other applications that canleverage the unique capabilities o todaysmobile networks.
Motivations or opening upnetworks
Revenue pressure on core services isorcing operators to ind and developnew revenue streams. Competition isorcing operators to develop new orms ocustomer loyalty, and at the same time theyare also being orced to react to the threato disruptive new entrants into the newservice-oriented value chain by bringingout, or example, their own applicationstores, dierentiated by the integration otheir own unique network APIs, such as
9
The network is, always has
been and will remain a key
form of differentiation and
innovation for any mobilenetwork operator. Whatever
doubts might be raised
by network outsourcing
or ubiquitous network
coverage, dont think for
a minute that the network
no longer plays a role in an
operators core strategy.
How can operators maximize the mobile broadband opportunity?
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billing, location and voice and messagingintegration (and hundreds o others).
Added to this, more and more thirdparties see the commercial, societal or evenenvironmental value o integrating wirelessconnectivity into their own verticalproducts, and this is creating a waveo demand to access and use operatorsnetworks. An open-network approach isessential to jumping on this opportunity.
Finally, by oering network assets todevelopers and eectively outsourcingservice creat ion and development,operators can reduce the cost and risksattached to service development and canimprove time-to-market.
Customer or tomorrow:
B2Anythinghese ever-morphing changes in the
industry are also creating a paradigm shitin the denition o an operators customer.
Now, howeve r , op e r a t o r s mus tcompletely redeine the concept o
who their potential customers are. In acommunications world, humans are thecore customer base, but in a world wherethe network is also a service enabler orthird-party organizations, customers canbe anybody or anythingits the move
rom B2H to B2Anything, rom thesmall application developer in the garageto Amazon, BMW and the governmenthealth ministry.
And an open-network po l i cy i sessentially a strategic structural shitto address the long tail o demand oraccess to mobile network assetswhoeverthat potential partner may be. Vodaoneexempliies this trend toward an opennetwork platorm and vision o serviceenablement. As Mr. Vittorio Colao, CEOo Vodaone Group, said: Our visionis eicient pipes, smart networks and acommunication-centric platorm. his isour vision or the uture, and this is alsothe concept o Power to You, the newbrand position that we have: power tothe customers, reedom to the customers,but enablement through our eicientcommercial and technical platorm.
How can operators grow newrevenue streams
O c ou r s e , t he k ey que s t i on i show operators can make money romopening up their networks. What is themonetization strategy (or monetizationapproaches or open-network strategy) inthis new age o service delivery?
here are several ways operators candevelop new incremental revenue streamsrom pursuing an open network model.
Fir st i s the two-s ided wholesa lemodel. I primarily see this as an evolved
wholesale strategy, oering up wholesaleaccess to their network services (e.g.volumes o data) that can be integratedinto downstream service propositionssold by third parties. Te classic exampleis the Kindle model, in which Sprint ismaking high-margin incremental revenue
rom wholesaling data capacity on itsnetwork. Each Kindle connected to itsnetwork might be worth only about 2USD a month in ARPU to Sprint, butthis is incremental new revenuealso muchhigher margin, given that there is no needto support CRM or to invest in marketing,advertising or distribution.
Second is chargeable APIs . hisis simple: charging a ee to access anoperators network assets. his could be,or example, charging a set monthly eeto allow a developer to use an operators
bi l l ing p lat orm or in-applicat ionpayments.
hird is revenue-sharingthe classicmodel in which an operator takes a slice ooverall revenues. For example, an operatorcould take 30% o any application revenuegenerated rom applications downloadedvia its own app store.
F o u r t h i s s e r v i c e m a s h - u p s a monetization stream opened up byincremental traic volumes created overits network by service mash-ups that use
an operators core voice and messagingcapabilities. A successul example is OrangeFrances monetization o an applicationused by pharmacies to deliver prescriptionadvice to patients via an application. Not amassive trac driver, but new billable tracon the network.
More than new revenue streams
But lets be clear: Although paths tomonetization in the era o next-generation
service delivery exist, it is ar rom beingall about increasing revenues. here aremore strategic motivations or developingan open and innovative next-generationservice-delivery platorm, which includecus tomer acqui s i t ion , loya l ty andchurn reduction, new and incrementalrevenue streams, and brand value anddierentiation, all surrounding customer-value creation.
Alongside the revenue models I haveoutlined, an open network can createvalue by attracting new customers to anoperators network. Tis is especially true
where strong brands rom the Internet world can be embraced as partnersand used to attract customers to theirnetworks. In Sweden, eliaSonera, the
incumbent mobile operator, has partneredwith Spotiy to deliver enhanced musicserviceswith its primary goal to driveacquisition and retention in a competitiveclimate.
More important, next-generationservice delivery is a way to ensure thatthe network and its value remain centralto everything. An application with anoperators billing and location assetsintegrated is by denition more valuable toan end-user, while a VoIP proposition thatleverages an operators ability to provide
QoS guarantees is also o higher worth.An e-reader with mobile connectivity isan enhanced value proposition or users.
All o this additional value providesan opportunity to earn new revenue.It requires a massive shit o mindsetand structural reorganization, but theopportunity is real.
o conclude, mobile broadband,with the opportunity it promises withan estimated 38 billion USD revenue by2013, also brings unprecedented challenges
or network managers. Operators mustinvest in intelligent packet managementto segment mobile broadband users, createnew revenue opportunities and managenetwork resources more eiciently. Weare glad to see operators embracing opennetwork strategies to maximize the revenueopportunities rom next-generation servicedelivery. Keep going. A brave new worldlies ahead.
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Editor: Zhu Wenli [email protected]
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LTE is now
LTE is nowOn December 14, 2009, TeliaSonera announced that the worlds rstcommercial LTE network was ofcially up and running in Norway. This networkrepresents a milestone in realizing the LTE dream.By Yan Yun & Zhao Yuan
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Why LTE?
s smart phones such as the iPhoneand Gphone continue hittingthe mainstream, the use o data
services and the demand orbandwidth are exploding among subscribers.Operators are orced to cut per-bit coststo competitively supply Internet access viamobile phones, especially the increasinglypopular and bandwidth-hungry HD VOD.
Te LE solution has come at the righttime. LE technology raises bandwidt hand lowers latency, while its lat All-IParchitecture simplies networks and reducesthe number o required NEs and thus themaintenance burden or operators. hesegains in turn push down CO and allowoperators to cut per-bit costs. Moreover,data services over LE networks are ultra-ast and QoS is high thanks to greaterservice diversity and tailoring capabilities.Unsurprisingly, operators are beginningto position LE as the uture o mobiletechnology.
ABI reports that LE networks will reallybecome visible during 2010 and 2011 inthe shape o 15 commercial LE networks
worldwide. By 2013, an estimated 30million mobile broadband subscribers will
have access to LE network services through70 or so LE networks. Between 2014 and2015, commercial LE networks will bedeployed on a massive scale and, by 2016,10% o all mobile broadband subscribers
will be accessing LE services.
TeliaSonera: today shapestomorrow
eliaSonera has taken an early and
impressive lead in the LE era. As the largesttelecom operator in the Nordic and BalticSea region, eliaSonera operates networks in18 countries and serves 182 million mobilesubscribers. As a known technical innovatorand pioneer, eliaSonera built Europes rst3G network in 2003 and the continentsrst HSPA network in 2007. In 2008, dataservice traic across its networks rocketedby 492%, boosting related revenues by over60%.
Strategically, eliaSonera innovates its way
into a leading market position and keeps pricescompetitive. Its condent oray into LE is noexception. Lars Nyberg, the company presidentand CEO, remarked, Mobile broadbandaccounts or most o the growth in broadbandservices. And mobile broadband will carry thegrowth within the mobile business or another10 years. We really see mobile broadbandtaking o and we aim or the same marketleading position in mobile data in Sweden andFinland, as in other services.
According to Mr. Nyberg, there are threeactors that are essential or operators tosuccessully transorm their service portolios.First is network quality, which is the toppriority; Second is rapid and high-qualityservices that are capable o garnering customerloyalty. And lastly, OPEX needs to be lower
than that incurred by competitors.In January 2009, eliaSonera contracted
Huawei to construct the wor ld s i r s tcommercial LE network in Oslo. LarsKlasson, Senior Vice President and CO,Mobility Services o eliaSonera said, We havechosen Huawei as our partner based on theirstrong ocus on LE development and earlydeployment capabilities, as well as Huaweisimpressive and proven worldwide track recordin advanced mobile technology.
Te partnership culminated in the worldsrst mobile broadband access via a commercial
LE network on June 3, 2009. he twocompanies used an LE modem to connecta laptop to the Internet to bring alive the ullrange o mobile data servicesincluding moviedownloads and commerce at much asterspeeds than ever achieved by xed broadband.
June 2009 also saw the partners cooperationdeepen, with eliaSonera selecting Huawei todeploy Europes irst commercial SingleRANnetwork. Te solution utilizes sotware denedradio (SDR) technology to shit broadbandrom xed to mobile in the remote rural areas
o Finland.
LTE speeds up in Europe
While eliaSo neras innovat ions ha veconsistently achieved global rsts and remainthe building blocks o the companys success, itis not the only operator with its eye on LEseveral multinational giants rom Europe arealready making their play. hree o the ivepublicly announced LE contracts are rom
A
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LTE is now
European operators, conrming Europe asthe major stage or LE competition.
Te rise o LE
In October 2009, MS, the CISs largestmobile operator, contracted Huawei todeploy the regions irst LE network inUzbekistan.
Oleg Raspopov, Vice President andHead o Business Unit MS ForeignSubsidiar ies remarked, MS haslaunched 3G network in Uzbekistanrecently, and intends to urther introducethe cutting edge telecom technologies inthe country. Im sure that the license orLE networking that we obtained, andan agreement we signed with Huawei
regarding our intentions to develop thistelecom standard in Uzbekistan willcontribute to the introduction o thistechnology as well as give a powerulincentive to the development o thetelecom sphere in the country.
In November 2009, elenor, one othe worlds top ten mobile operators,c on t r a c t ed H uawe i t o d ep loy i t scommercial LE network in Norway. Asthe exclusive vendor o elenors wirelessnetworks or the next 6 years, Huawei
plans to migrate and upgrade the operators2G and 3G networks, and deploy Europeslargest commercial LE network acrossNorway.
A ew days later, Belgacom, Belgiumslargest telecom operator, signed a contract
with Huawei to deploy its SingleRANsolution and ourth generation SDR basestations. he solution will migrate andupgrade Belgacoms 2G and 3G networksinto high perormance, large capacity, anduture-oriented HSPA+ networks, andintegrate the operators GSM, WCDMAnetworks with its LE network that coversBelgium.
Brussels is oten regarded as the capitalo Europe given its political signiicance.Including the EU and NAO, over 100
key institutions are based in the cityand the number o high-end subscribersrequiring high grade mobile services isconsiderable.
Project completion will realize amuch simpler network structure that
will raise reliability and perormance inorder to satisy local high-end consumersand provide over 5 million Belgacomsubscribers with next generation mobiletechnology.
By partnering with Huawei or the
progressive swap o the current radionetwork, Belgacom continues to pursueits xed mobile convergence strategy in acontrolled way, Scott Alcott, ExecutiveVice President at Belgacom remarked.It will allow us to reinorce our mobileleadership in Belgium over the years tocome.
rial networks
P r e c e d i n g u l l L E n e t w o r k commercialization, many operators aredeploying LE trial networks.
In August 2009, Vodaone Germanyand Huawei announced joint plansto conduct the industrys irst LEperormance and application test within
the Digital Dividend Band, which coversthe 790 to 862MHz range reed up by thechange rom analog to digital V. Knownas the Gold Band, the range oers
wider than usual coverage and a largertransmission capacity. Consequently, it is ahotly contested prize or operators.
Utilizing the Huawei E2E solution, theVodaone/Huawei test aims to enhancemobile broadband network coverage andconrm that LE technology, digital V,and broadcast technologies are compatible
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within the Gold Band.In October 2009, Huawei and the global leader,
-Mobile, successully perormed the worlds irstsel-organizing network (SON) unction test acrossthe Innsbrucks trial LE network. As a key LEsolution, SON can sel-congure, sel-optimize, andsel-maintain. SON technology sustains connectivityand perormance even when network topologychanges, which simpliies and reduces O&M ortechnical sta, and lowers the OPEX incurred byplanning, optimization, and deployment.
Prior to the test, -Mobile and Huawei hadalready deployed Europes largest LE/SAE trialnetwork in Innsbruck, across which the partnersconducted the worlds irst multi-subscribermobile broadband service test. Mirroring an actualenvironment, the role o the LE/SAE trial networkis to better understand end user experience and the
technologies involved. As LEs core network, SAE provides high
perormance, high rel iab i l i ty , and seamlessevolution capabilities across a uniied and largecapacity platorm. With -Mobiles expectat iono incorporating the test results into the industrystandard, the LE/SAE trial network perormedsolidly in a range o complex scenarios.
In November 2009, elecom Italia contractedHuawei to deploy the irst LE trial network inurin, Italy, reairming that LE is irmly onEuropes doorstep.
TD-LTE technology debuts at2010 Shanghai Expo
he World Expo, the Olympic Games andthe World Cup are three major global events thatdemonstrate the unity o modern civilization byshowcasing our greatest technological and sportingachievements. At the 2010 Expo in Shanghai, Huawei
will demonstrate its capabilities in D-LE networkdeployment, service application, and technical services.
he Huawei E2E demo network is alreadyoperational across the 5.28km2 site, providing users
with high speed mobile broadband services at adownlink rate o 29Mbps. Integrating LE wirelessaccess and an SAE core with catch-and-transerterminals, users can transmit data across the LEmodules high-speed mobile Internet, including live
HD video, les and photos.Visitors around the Expo site and even those
in the bus or relaxing on yachts on the HuangpuRiver can also access detailed inormation aboutthe Expo through HD mobile video, bringing anunprecedented level o inormation access right intothe palm o peoples hands. Additionally, the system
will guarantee saety through onsite security centersthat use D-LE-based HD image collection tomonitor vehicles, boats, and attendees.
Li Changzhu, Deputy Chie or Huawei in China,explains the signiicance o D-LE networks:
While TeliaSoneras innovations have consistently achieved
global rsts and remain the building blocks of the companys
success, it is not the only operator with its eye on LTEseveral
giants from Europe are already making their play. Three of
the ve announced LTE contracts are from European operators,
conrming Europe as the major stage for LTE competition.
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Tere will be a major attraction at the World Expo2010 Shanghai, and the proile o LE amongglobal operators and industry organizations is sure toincrease as a result. In particular, our industry-leadingFD/D LE solution oers higher bandwidth, ewerdelays and more ecient spectrum utilization thanever beore. On a wider scale, weve already deployedunied SAE core networks across the globe, and aremaking great progress in the eld.
By realizing mobile Internet through broadband, we believe that our demo network will ortiythe Expos theme o Better City, Better Lie,and represent a milestone in terms o its overalldevelopment.
Huawei leading LTE
commercialization
Cumulative experience plays a pivotal role
As a globally-leading mobile communicationssolution provider, Huawei is conident that LEtechnology will lead uture-oriented networkevolution. Huawei began to develop LE technologyas early as 2004 and, with cumulative experienceand sustained investment, has helped stimulate thematurity o the LE industry through its key role inseveral LE standards organizations.
In 2006, Huawei set up several D-LE and FD-
LE technology pilot networks in China, Europe,North America, and Japan, and initiated several E2Eeld test projects beore producing the worlds rstLE sample in early 2007. Huaweis LE networksare more mature and stable than the global trend asthey are underpinned by Huaweis industry-leadingourth generation base station platorm. In 2008,Huawei consolidated its leading position by veriyingdual-mode HSPA/LE, CDMA/LE, and D-SCDMA/D-LE services. At the Mobile WorldCongress in Barcelona in February 2009, Huaweiunveiled the industrys irst FD-LE and D-LEintegration solution, beore releasing the worlds rstcommercial LE eNode B at the Huawei Global UserConerence in Munich in July 2009. his ratiiedits place as the worlds irst equipment providercapable o developing commercial LE networks. odate, Huawei has deployed over 25 LE networks
throughout the world.
Flawless perormance
he superior perormance o the HuaweiLE solution also sharpens its competitive edge.hrough advanced technologies including MIMO,sot requency reuse, and intererence control,the Huawei LE solution increases cell capacity,enhances the stability o wireless access, and raisesnetwork coverage capabilities. Additionally, Huaweihas launched its E2E LE/SAE solution eaturing
With only two markets in the world gracedby commercial LE services as o mid-December(eliaSoneras launches in Stockholm and Oslo), itsclearly too early to make any iron-clad declarations.
hat said, one need only look back to Stockholmand Oslo to identiy what should be two LE ront-runners: Huawei and Ericsson.
Huawei claims one o the astest growing (andmost inancially successul) wireless inrastructurebusinesses backed by a cost-eective set o productsthat stretch rom the mobile edge into the carriercore and what it claims is a strategic ocus onramping up its proessional services capabilities.
Perhaps more importantly, its multi-standard basestation platorm has been in the market or sometime, proving out its capabilities and setting up LEupgrade opportunities. And, where an operator
wants a real end-to-end solution (or just a littlehelp in ramping up early device supplies), Huaweiis well known or supporting operators with mobilebroadband devices including USB dongles andphones.
As o December 2009, among the 12 high-proletrials and commercial LE contracts already publiclyannounced, Huawei had bagged 6 contracts, makingit the leader o LE market.
From LTE The Market & Its Requirements by Current
Analysis: Huawei pulls ahead in LTE
15
LTE is now
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Editor: Pan ao [email protected]
integrated terminals, O&M, eNodeBs, Evolved Packet Cores (EPCs), andtransmission. Te solution is designed toboost operators business developmentspace and lower the CAPEX incurred bynetwork upgrades.
Huaweis diversiied eNode B andEPC product series minimizes delaysand raises speed. he series also provideshigh spectrum utilization, All-IP lexiblenetworking capabilities, and can seamlesslyevolve 2G/3G networks into LE. Fieldtests demonstrate a physical layer downlinkrate o up to 173Mbps, the highest in theindustry, coupled with a switch successratio that exceeds 99%.
As the industrys rst vendor to developpower ampliication technology in RF
equipment, Huawei has made eiciencygains o 40% in wireless base stations andleads the industry in terms o reducing thepower consumption o LE base stations,
which signiicantly reduces operatorsOPEX and boosts operators protability.
Most patents
Huawei has the largest number o LEpatents o all global equipment providers.ESI statistics record that Huawei had
obtained 168 LE patents by the endo November 2009, around 10% o the
world total o 1,650.
Promotes industry chain
developmenthe goals o industry leaders transcend
sel growth and actively seek to guide thedevelopment o the whole industry chain.In July 2009, the open LE laboratoriesset up by Huawei in exas and okyo wereo cially put into operation. Te exas lab inRichardson serves as an open LE technicalplatorm or North American operatorsand partners to rigorously test LE systemsbeore deployment, which will be crucial orLE development in the nation.
he okyo lab i s a cutt ing-edgetechnological incubator with completetesting acilities that mirror an actualenvironment to test peak throughput,delays, multiple subscriber usage, switches,and SONs. Equipped with HuaweisDBS3900 ourth generation base stations,the latest commercial LE sotware, anda ull range o testing terminals, the labprovides testing and training services toully prepare operators and partners or thecommercial deployment o next generation
wireless technology and LE networks.With a ull knowledge o the importance
that terminals have on the whole industrychain, Huawei is jointly conducting IOs
with numerous LE terminal vendors. InNovember 2009, Huawei and Samsungconducted a successul and milestone jointIO on a Huawei-deployed LE networkthat incorporates Samsungs commercialLE modem. Te success o the test signalsthe end o the technical bottleneck plaguingLE terminals, and helps close the E2Eloop that is essential or large scale LEdeployment.
he strong development o the LEindustry responds to societys higherrequirements or mobile communicationservices. Huawei is a proven powerhouse
in the LE ield, having contributeds ign i i c ant ly to bu i ld ing the LEindustry chain and leading the ield incommercially applying LE networks.hrough sustained investment in LEtechnologies and deeper cooperation withthird party players and operators, Huawei
will utilize the breadth o its experienceand knowledge to enhance the personaland proessional lives o people across theglobe through LE.
1
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Telecom industry trendsin the next decadeFor 20 years, continuous technical transformation and information waves have driven high growth in thetelecom industry. However, an age with saturated telecom penetration is coming, and telecoms industry is
facing a brand new situation. Looking to the next decade, how can the telecoms industry adapt itself to the
requirements of the new age in the changed environment? Through Four Surpasses, the telecoms industry will
continue to achieve high growth in the next decade.
Surpassing population
and developing new
subscribers: the Internet
of Things opens a door to
new opportunities
he r ap id deve lopment o mobile communication andthe Internet acilitates theapproaching o a global
village. In some developed countriesand regions, mobile communicationpenetration rate has already reached orsurpassed 100%. In the coming two years,the number o mobile subscribers will beup to 5 billion, and the network will coverover 80% o the global population.
However, it is ar rom enough toachieve the connection o human beingsand utilize the intelligence o humanbeings. oday, we are aced with manycommon problems. For example, energyshortages coexist with massive wasteso energy. According to research romUnited States Department o Energy,electrical energy loss accounts or 67%o the total electrical energy produced.Science and technology improves our lives,yet on the other side it results in seriousenvironmental pollution. Statistics romthe Asian Development Bank shows 20%o the global population lacks access tosae drinking water, 50% o the populationdoes not have adequate health care
he Internet o hings emerges underthis background. he essence o theInternet o Tings is to apply inormation
and communication technology (IC)to dierent industries, thus realizingIntelligent Perception and IntelligentControl via the adoption o IC andachieving the objective o eiciencyimprovement, scientiic decision making,ene r gy s a v ing and env i r onment a lprotection, and cost savings to promotethe upgrade and development o humansociety rom an electronic society (Esociety) to a ubiquitous society (U society).
he Internet o hings describes anunprecedented blueprint or industriessuch as telecom and I. It is predictedthat by 2020, the ratio between machinetype communications to human typecommunications will reach 30:1, which
will allow operators to extend theirsubscriber base rom 6 billion people to 50billion or even over a trillion machines and
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objects, and thus opens a new door andserves as the basis or surpass populationand developing new subscribers or thetelecoms industry.
Surpassing voice
communications
and developing newservices: mobile
broadband contributes
to the industrys rapid
development
he revenue or voice services hassaturated or even gradually declined
wi th the deve lopment s o mobi lecommunication in the past decade. Inthe past ive years, the revenue or ixedvoice services was reduced by 15%, andthe growth rate o mobile voice servicesdecreased rom 17.5% in 2004 to 1% in2009 in Spain. Even in emerging marketsrepresented by India, the revenue perminute (RPM) o mobile operators in2008 ell 50% compared with the sameperiod in 2007.
At the same time, mobile broadbandis entering a golden age o development,bringing human society to a new heighto ubiquity. he number o mobilebroadband subscribers will increasetenold, reaching 3 billion in the next 5years. However, we still have not ullyutilized mobile broadband, which dependson the joint eorts o the entire industry
1
chain, including terminal, network,and service. Although new networktechnologies such as HSPA/LE arecapable o supporting the cost eectivenesso mobile broadband development, thereare many challenges ahead in acing thethousandold traic increase o mobilebroadband or the next decade. New typeso smart terminals such as iPhone bringconvenient man-machine interactions,yet the high price o smart terminals isthe biggest bottleneck that restricts thepopularity o mobile broadband. WOAtechnology, represented by Widget,can move Internet services and industryservices to mobile phones, great ly enriching the services and applications ormobile broadband.
Currently, an open ecological environmentthat includes terminal, network, and
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service which centered on broadbandexperience is in an early orm. Withthe challenges o traic and cost beingovercome, it is predictable that mobileb r oad band w i l l b ec ome t he mos tsigniicant orce to promote industry
development. Operators can achievesustainable growth i they ocus ondeveloping mobile broadband servicesrather than voice communications.
Surpassing the pipeline,
and exploring new
business model: cloud
computing brings new
opportunities
he popularity o broadband provides abasis or cloud computing. Cloud computingappears in the orm o an inormationpower plant, and is overturning thetraditional business mode o sotware,hardware, and media. hat is, users aremoving rom buying products to buyingservices.
he change in the business modeis redeining the industry structure.
By changing the distribution mode osotware to terminal (iPod/iPhone) +application (iunes/Appstore), Applehas surpassed Wal-Mart and become thelargest music distribution channel; Googleis incubating a larger revolution to achievedevelopment, deployment, and operationo sotware and services through its APPengine, with lexible expansion basedon traic through the cloud computingplatorm and cloud storage platorm atthe bottom layer. In this case, there is noneed or sotware vendors and users to
buy any hardware equipment or platormsotware. Tis technology will overturn thesales modes o hardware and sotware orcompanies such as IBM, HP, Microsot,and Oracle.
he development o cloud computingalso brings opportunities or operators. Onthe one hand, cloud computing has shownthe signiicance o networks and thuspromotes network development. On theother hand, cloud computing services rely
PCs and mobile phones. he third is asensor network. he ourth is a videosurveillance network. Te th is a homenetwork. he sixth is an interconnectionand control network. Among the sixcomponents, the V screen is the irst
to experience revolutionary change.On-line and On-demand will bringconsumers a brand new service experience.Consumers can reely select contents,releasing themselves rom a rigid schedule.he brand new service experience willoverturn the video industry dominated bybroadcast and DVD.
Microsot CEO Steve Ballmer said in June 2009 that traditional media woulddisappear within 10 years, being replacedby Internet-based content. EU pointedout in Internet o 2020 that by then, Vchannels are distributed as other Internetservices, and do not need terrestrial orsatellite broadcasting anymore, except inisolated areas. I the past decade witnessedthe convergence o telecom and theInternet, the next decade will witness theconvergence o broadcast, V, and theInternet.
H ome ne t wor k ing i s t he ma jo rbattleield or network convergence otelecoms, V and the Internet. Te bi-direction and high bandwidth eatures o
the telecom network have an advantagein network convergence, and provideunprecedented strategic opportunities oroperators to surpass telecom, and enterinto new industries.
Looking orward to the next decade,our surpasses will help operators break theceiling o population, voice, pipeline, andindustry, and bring the telecom industry toa new height. However, it takes a long, hardtime to achieve our surpasses, especiallyaced by the hundredold increase in networktrac brought by mass terminals and massdigital contents.
Te trac o mobile networks will increasea thousandold, bringing unprecedentedchallenges to bandwidth and cost. Huawei
will innovate products, services, architectures,and technologies as always, develop a uture-oriented single network strategy to supportgrowth o uture services, and promotesustainable development or the entireindustry.
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Telecom industry trends in the next decade
Editor: Gao Xianrui [email protected]
on secure and reliable service providers,and secure and reliable are exactlyadvantages o operators. Conversely, wealways see Internet service providers,no matter large or small, shut downInternet services or even go bankrupt.
I operators enter the cloud computingmarket, they can orm new services andexperiences based on secure and reliablemass computing storage by integratingindustry contents and applications inthe digital supermarket mode, providecustomers with new values, and give ullplay to operators networks and subscriberadvantages. In addition, by utilizingreliable and enormous user assets obtainedthrough customer locations and userexperience, operators can employ newbusiness models and cultivate new revenuestreams through building data mining andadvertisement platorms.
Te market or cloud computing willmove into a rapid development phase,
with the market size exceeding 200billion USD in the next ve years. Cloudcomputing will be the key or businessdevelopment or operators, to realizeextending network value by surpassingthe pipeline.
Surpassing telecom
and extending to
other industries: the
revolutionary experience
of home networking
creates new markets
It is well known that the new experienceo digital music and music modes likeMP3 overturned the CD and musicdistribution industry; that is, the revolutiono the user experience overturned anindustry. With the increase in broadbandpenetration, what kind o revolution o userexperience will home networking bring?
Which industries will be overturned?Lets look at the composition o home
networking. he irst is an audiovisualenter t a inment network dominatedby a V screen. he second is acommunication network dominated by
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Cloud Computinga world-changing powerBy Dr. Fang Binxing
Definition of cloudcomputing
loud computing is basicallya business-or iented ormo Internet computing andac tua l ly an ex tens ion o
grid computing. Grid computing wasnot widely applied due to its lack obusiness potential. Developed to researchdistributed computing, grid computingcomprises a super virtual computercapable o perorming ultra-large tasksvia a cluster o cooperating, loosely-
networked computers. Cloud computingevolved this concept and gave it a businessedge. he earliest deinition was coinedin 1997 by Ramnath K. Chellappa, anassociate proessor o economics at theUniversity o exas. He explained cloudcomputing as a computing paradigm
where the boundaries o computing will bedetermined by economic rationale ratherthan technical limits.
Cloud computing began to be popularin the computing world at the end o 2007and has now almost entirely replaced gridcomputing. Nevertheless, its denition isstill contested: at the international cloudcomputing conerence in January 2009,over 22 denitions were proposed, thoughadmittedly many o these covered some oits conceptual attributes.
What is cloud computing? I believethat it is a computing and processingmodel or acilitating the unlimited useo Internet computing resources througha computer terminal. Cloud computing
2
CCloud computing is reshaping the computing and Internet landscape.
With breakthroughs made in relevant service and business models,
cloud computing will inevitably expand its role as a backbone for IT
services. As a revolutionary concept, its technological realization is
set to change the way people work and live.
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Cloud Computing: a world-changing power
space size, but not storage mechanics. Tishas given us Sotware testing as a Service(StaaS). Users want their requests to besatisied, but are not concerned with theprocess, creating Platorm as a Service(PaaS). Finally, users are concerned with
the availability o computing systems, notthe inrastructure through which theyare implemented. Tis has brought aboutInrastructure as a Service (IaaS).
Cloud computingsecurity
Cloud computing changes personaland enterprise computing models in a
way that makes inormation security as
relevant as it is or online banking services.hough c loud computing has beenapplied to network security, it remainsto be seen whether its architecture is aninormation trap that is ripe or misuse orexploitation. o provide secure services,cloud computing must address this issue atthe ollowing three levels:
How does cloud security work?
In the current networking environment,client-based rojan checks are increasingly
discredited as a solution. o checkmalicious codes, security vendors needa cloud computing platorm where aninbuilt cloud security system pre-scans webpages and immediately inorms the usero a pages saety. Te advantage o cloudsecurity is its ability to scan all web pagesusing large-scale computing capabilities.For end users, the web is only one dangersource; others include emails and USBs,though the cloud security system does notapply to users who do not wish to publishtheir personal inormation.
H o w e v e r , t h e c l o u d s e c u r i t y system has a atal weaknessits over-reliance on transmission channels. Userinormation and resources are handedover to the cloud or processing andtransmission and security depends onthe internal transmission channels. Inorder or cloud computing to unleash itspotential, cloud service providers must
work with broadband service providersto bui ld a broadband transmiss ion
a search cloud by prearranging andconverging all available inormation onthe Internet so that the user can quicklyget the search result. he highly populartaobao.com centralizes and convergesonline stores to orm a cloud market
much in the same way that a traditionalshopping mall converges physical stores.Moreover, i we converge video datacollected rom myriad video camerasinstalled on city streets to provide VOD,
we can establish a cloud view.
Capability supply
What does a cloud bring us? o becalled a cloud, it must supply computingand processing capabilities and shareresources. In the early 1990s, we researched
computing capability supply with a ocuson presenting storage space and databasesand interaces or delivering their storageand search unctions. Converged resourcesand computing capabilities are useless
without a supply channel in the same waythat taobao.com would be useless withouta shopping platorm to enable transactions.
Service model
Te as a service (aaS) model is gainingpopularity in the computing world. It is
about services, not technologies, or usersusually care about the services they aregetting, not the technologies or resourcesinvolved. For example, we initially boughtull-priced sotware and prepared necessaryresources or it, no matter whether we
would use it or not. Later, we sharedsotware on the Internet at a lower cost
without needing to prepare resourceson the client though a ixed cost wasstill incurred or the usage over a certainperiod o time. With cloud computing,
we can directly use the sotware unction(the service) provided by the cloud even
without knowing the sotware, on a pay-per-use basis without an awareness o thesotware involved.
Many similar applications exist toconvert available capabilities and resourcesinto the services required by users. Userscare about sotware unctions but not
where the sotware is installed, which hasspawned Sotware as a Service (SaaS).Equally, users are interested in storage
serves users through a central resourcepool. Conversely, grid computing serves alimited number o users by