Winning in FMC 2.0 UBB Network Infrastructure Driven by Applications, Cloud and Experiences

Welcome to Enter the FMC 2.0 Age

All IP reshaped network, driving the

growth of Internet

Applications, Cloud, Experiences

FMC 1.0: Connectivity Driven FMC 2.0: ACE Driven

Cloud

OTT Applications

Connectivity Anytime Anywhere Anything

Internet boom changed the demand of

people for communications

FMC 2.0 = FBB + MBB + Content

ACE is driving Telco strategy evolution,

while IT will reshape network for this time.

All IP architecture

OTN/NG WDM

Video Voice HSI MBB LL

IP Traffic

Fixed Mobile Convergence

FBB MBB

Content

MBB

Cloud

Application

Experience

User Bandwidth

Reshape CT

with IT

Expansion

towards IT

Full Service Broadband

（FBB+MBB+ ）

BB Monetization via

Content Collaboration

Expansion towards

Cloud Service

Driving Business

Operation towards

DevOps

How to Win in FMC 2.0 Age: 4-Pillar Strategy

…

FMC 2.0 Age: Full Service Broadband is the Footstone

0.61M

0.0

1.1

1.7

2.2

2.6

12Q3 12Q4 13Q1 13Q2 13Q3

1.1M

Fusion Sub Addition of TEF Spain(M)

FUSION

One Bill: 59.90€/Month

a family-centered service bundling

Imagenio

6HD Chs 100M

Call Free

1G Data

SMS Free

4G Ready Unlimited

+ + + MBB

FBB

Time

Throughput

No Usage Cap Traffic Based

FBB:61GB

MBB:4GB

Typical Monthly Traffic Usage in US (2013)

24Mbps: 66$ 4G: 70$

F&M Synergy for Best User Experiences Incredible Power of Bundled Service Full Service Offering by TOP 20 Telcos

Constant Connection

Sudden & Fragmented

Full Service Broadband: Building a Ubiquitous Ultra Broadband

20M

100M

1000M UBB @ anywhere

Ultra-broadband Ubiquitous

UBB Network Infrastructure Driven by

Applications, Cloud and Experiences

Transport Backbone

Ubiquitous

Access by

Wireline &

Wireless

Synergy

Enterprise

City Home

Rural Home

Mobile

Aggregation

700k+ in 4 years

OTT Applications 100G 400G 1T

FTTH Civil work cost

Civil work cost is the biggest challenge for FTTH

Copper has bigger potential than we originally expected

FBB and MBB are complementing each other (e.g. Multi-stream Bonding)

DSL/CMTS/LTE Performance and coverage

Service PoP density and energy efficiency

Transport fiber extension/expansion

Aggregation

LTE

Fiber Fiber

400G 1T 100G Multi-stream

Bonding

+

HetAN

Full Service Broadband: Capacity Challenge Comes in Many Ways

FTTH

CMTS

WiFi

DSL

Full Service Broadband: Ubiquitous Connectivity for IoT

2G/3G/4G/WiMax

Sensors / Devices

WiFi Proximity Network POE/PLC Zigbee/RF

Universal IoT Gateway

Universal IoT Cloud Platform

ISV APP

FBB Network MBB Network

8%

79%

13% Cellular M2M

Short-range communication

Cable and satellite

50 Billion connections

until 2020

79% short-range

Wi-Fi, Zigbee, Bluetooth, PLC etc.

Source: Machina & Huawei

IOT

Connections

by Tech. 2020

FMC 2.0 Age: Selling “Connectivity + Experience”

•Explosive traffic growth

•Concentration of internet content

supply (Power-low Distribution)

•Dynamic internet traffic profile

•Continuous capacity expansion

•Embracing SDN/NFV for efficiency boost

•Looking for innovative business model

Connectivity-oriented Broadband

Independent efforts by ICP and ISP to optimize user experience.

ICP

ISP

End User

•Bandwidth-hungry consumption

•Unhappy about UBB experience

•Potential to pay for better experiences

Experience-oriented Broadband

Provides mechanism for content and pipe collaboration to create

better user experience and consequently extra value.

ICP

ISP

End User • Content and pipe collaboration

• user experiences boost

• Creating/sharing extra value

Broadband Monetization: China Telecom has its Way

Basic BW

B X ellerated asic

End User

Telco

Ordinary VIP

Open Capability Share Revenue

Instant speeding Extra Payment

… OTT

3.5M$ Revenue Sharing

4x More Paying Customer Superfast Download Speed

20x

A Win-Win-Win Achievement

VIP gets 20MB/s download speed over 4M BW with CTC Xiamen network

* Thunder is the biggest ICP in downloading field in China

Abstracts its network resource as API and open to ICPs

Thunder

Network Capability

Download Resource

4M 4M 4M + 16M(Thunder Exclusive)

Non Thunder VIP Thunder VIP Thunder VIP with CTC Xiamen

20KB/s, 2GB/27Hr 400KB/s, 2GB/1.38Hr 2MB/s, 2GB/16Min

Broadband Monetization: Potential Telco & OTT Synergy

Content richness Freemium Business model

Response time

Customization

QoS

Bandwidth

Multi-screen interactive mobility

Loyalty Authentication and accounting

Channel

OTT Operator

Network capability can not be monetized until it’s bounded with user experience

Downlink BW

Uplink BW

Delay

High-speed downloading, online video

Accelerated cloud uploading

Appealing On-line gaming

On-site experience based marketing

Pre-installed APP plug-ins, smart home

User Channel

Entry Portal

Telco Capabilities OTT Expectations

Broadband Monetization: Broadband Capability Monetization Solution

Service

Operation

Capability

Management

Smart-ized

Network

Backbone Metro Agg.

D-CMTS

VDSL2

GPON/EPON/P2P

OLT CR CM

HGW

BRAS + (eDSG)

AAA & BOSS

Hybrid

Service In-house IP Video

SDP ● Open API forming eco-system

● Content aggregation/curation/federation

NetOpen

● Network capability abstraction

● On-demand network resource control

● User experience monitoring

Broadband Monetization: Smart Home will be a Big Opportunity

• All-in-one box : GPON modem + Home Gateway + Memory box;

• Better connectivity : Home Connectivity Center + Smart Phone APP + remote O&M

Synergy with Edge Cloud

• Upstream Bandwidth, Downstream

Bandwidth, VPN(QoS assurance)

Smart CPE

Open

Platform

Smart Home

Connection

Smart Service

Smart O&M

(3rd Party

Service Plug-ins)

Remote control via smart phone

Management Platform for

Service Plug-ins Management APP

on Smart Phone

E-Learning eSmartHealth

Home

Entertainment

Home

Monitoring

Home

Automation

COTS

IP Core BRAS OLT

• Storage virtualized to Edge Cloud, lower ONT cost.

• So can Others, such as computing capability etc.

Easy Home

Synergy with Network Capabilities

NetOpen

CloudEdge

FMC 2.0 Age: Cloud Service Becomes New Battlefield

Disruptive Innovation

Sustainable Migration

Y2016

$211.85 Billion

Global Market Space for

Enterprise Cloud Service

TELCO Will Telcos win the Race?

Cloud Service: Beyond Amazon with Differentiations

TELCO Cloud Service

Local Presence &

Security / Trust

Existing Customer

Relationship

Quality of

Service & SLA Network/BB

Cloud Service: Seeking Opportunities in Cloud Wholesale/Brokerage

Hybrid Cloud will dominate in 2020 Serving as Cloud Services Wholesaler/Broker

Enterprise Cloud Market Segmentation

Non-cloud

Cloud

Public/Private

Hybrid

Public

Private

30%

70%

35%

65%

25%

75%

Enterprise Branch

OTT Public Cloud

Telco Public Cloud

Enterprise Private Cloud

Telco Network

CloudMall Management Platform

• Clouds Access • Clouds Interconnection • Clouds Management • Clouds Application

FMC 2.0 Age: Driving Business Operation towards DevOps

User Experiences in Digital Age

ROADs

Real-Time On-Demand All on-line DIY social Single

& All-IP TDM

ATM

SDH

FR

No.7

…

Ethernet

IP for all services

New philosophy and technologies of cloud computing

SoftCOM: Telco Cloud Formation Driving towards DevOps Model

RRU Service Cloud

Operation Cloud

CloudEdge

Cloud BB

ONT

ONT

Dynamic Efficient Scalable Automated Open

RRU

RRU

MxU Cloud

DSL/OLT

Eth Switch Eth Switch

WDM WDM Metro

Router Router

WDM WDM Backbone

Plan Code Build Test Release Deploy Operate

DevOps

Continuous Delivery

Continuous Integration

Agile Deployment

SDN-based UBB Network Control Cloud

SDN: Building New Network Foundation for Abstraction, Virtualization, Openness & Centralized-Control

FusionSphere

SDN

Controllers

Open API

DC Security

FW

LB

R

Service chain

DCI DC WAN

DC3

DC1

DCn

DC2

DC-SDN China Telecom : 300+ tenants DC outbound link optimization, network service automation

DCI-SDN 21ViaNet : 80 DC, 400 POP

China Unicom : 10+ DC, 2 separate networks Dynamic DCI path adjustment, bandwidth optimization, load balance

VPN-SDN • Tencent : 14 city, 50+ DC, 30W+ server, 3T+ bandwidth Traffic load balance, saving OPEX

WAN-SDN TLF: IP + Optics , 20+ core routers Improve service TTM

Ooredoo: IP-RAN ,16 IGW Simplify O&M, flexible link adjustment, reducing network rent fee

Policy-SDN China Telecom, China Unicom, China Mobile: PCE, NetConf, TE

CloudEdge - Migration across Mobile Edge, IP Edge & Service Edge

• Designed for distributed cloud deployment for feature migration w/o service disruption

• Ensure carrier grade service availability w/o sacrificing performance

• 20+ PoCs in place with trial availability, commercial deployment planned in 2014

NFV: Transforming Network Edge to Cloud for Simplicity, Scalability, Programmability and Differentiations

CloudEdge

COTS Hardware

Cloud OS Network OS

SDN Cntrlor vFamily • vAR • vCPE • vCDN

• IP-RAN • IP+Opt

• MME • PGW • SGW

vEPC • Gi-LAN • vPCEF

vMSE MANO • NFVO • VNFM • VIM

Full Service Broadband（FBB+MBB + ） BB Monetization via Content Collaboration

Expansion towards Cloud Service Driving Business Operation towards DevOps

Winning in FMC 2.0 Age: 4-Pillar Strategy

…

ACE-Band: Winning in FMC 2.0

Ultra-Fast Ultra-Broadband with Low Latency

Agile Better Experience, High Efficiency, Low Cost

Open Rich Services & Accelerate Innovation

ACE-Band

Application Cloud Experience

ACE-Band: Applications, Cloud and Experiences Oriented Ubiquitous Ultra Broadband