Decoding mobile broadband

HUAWEI COMMUNICATE
DEC 2009
ISSUE 53
DEC 2009
FT’s convergence
strategy and practice
Bharti Airtel catching
the broadband wave
Unlocking the secrets
of SoftBank’s 3G success
Synergies boost
mobile broadband
ISSUE 53
MSOs expand
business horizons
Decoding mobile broadband
Sponsor:
Huawei COMMUNICATE
Editorial Board,
Huawei Technologies Co., Ltd.
Consultants:
Hu Houkun, Xu Zhijun, Xu Wenwei
Ding Yun, Yu Xiangping, Liu Dongfang
Editor-in-Chief:
Gao Xianrui ([email protected])
Editors:
Xue Hua, Liu Zhonglin, Li Xuefeng, Huang Zhuojian
Xu Ping, Fan Ruijuan, Chen Yuhong, Yao Haifei
Pan Tao, Xu Peng, Zhu Wenli, Long Ji, Wang Hongjun
Zhou Shumin, Mike Bossick, Gary Maidment
Contributors: Zhu Yonggang, Yang Guodao, Han Bai
Zeng Cheng, Jiang Wenhua, Xu Yiqin, Li Xiaoke
Wang Haiqing, Zhang Shichuan, Zhou Jing
Li Gang, Sun Hui, Huang Bin, Liu Nanjie, Feng Li
Xu Shaomin, Chai Jiayong, Fan Lifeng, Xiao Jiwen
Zhang Feilong, Ge Yulin, Lin Peixing, Li Rong
E-mail: [email protected]
Tel: +86 755 28356172, 28356173
Fax: +86 755 28356180
Address: A10, Huawei Industrial Base,
Bantian, Longgang, Shenzhen 518129, China
Publication registration No.:
Yue B No.10148
Copyright © Huawei Technologies Co., Ltd. 2009.
All rights reserved.
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Huawei Technologies Co., Ltd.
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“The change from atoms to bits is irrevocable and unstoppable,” observed
MIT Professor Nicholas Negroponte years ago in his famed 1995 book Being
Digital. Displaying a panorama of life in the digital age, it has since inspired people
enormously, giving wings to their imagination. Today, being digital is no longer
about the future, but a reality. Mobile broadband, in its move from inception to
ubiquity, has filtered into our lives in a subtle, unsurprising yet profound manner,
changing the way we communicate, live and work, and even the way we see the
world. Indeed, the mobile broadband network and mobile Internet have developed
to a point where information is available and accessible anywhere and anytime.
Digitization, no longer the ink-on-pulp, is here and is now.
Yet the flipside of the coin is not quite as shiny, at least not for the moment.
While mobile broadband is infinitely promising, its rapid uptake also presents
many challenges. The increasing popularity of data cards, intelligent terminals
and video services, for example, invariably give rise to a huge tide of data traffic.
While dramatically boosting subscriber numbers, mobile broadband fails to
bring up revenues correspondingly. To combat these challenges, we must look
at the issue from a number of angles.
First, it is obvious that the traditional mobile network architecture cannot
support the long-term development of mobile broadband, hence questions that
invariably follow. What strategies shall operators adopt to construct a mobile
broadband architecture with robust access and bearer capability to cope with data
traffic spikes? How shall they strike a balance between market development pace
and network capacity? And how shall they diagnose the network regularly using
effective network evaluation tools and make sure that efforts are well coordinated
in network building, business expansion and market development? As technically
speaking LTE is widely recognized as the evolving direction for the mobile
broadband network, the coexistence of LTE and other technologies is inevitable.
How to effectively address the issue of interference between different network
technologies is one more question that operators have to ask and answer.
Second, it is high time that operators practiced lean management and
improved business performance to become profitable in mobile broadband.
Actually, this is what operators are working toward. Given the cutthroat
competition, price war is a ready resort, which always turns out to be pyrrhic,
though. So, how shall operators make the tradeoff between user experience,
network capacity and tariffs, and how shall they determine their bottom lines and
design a sound tariff structure to stay away from this trap of price war?
We have to confront all these questions head on before unleashing the full
potential of mobile broadband and make it profitable. Fully committed to the
belief “Utmost for Our Customers”, we at Huawei stand right by your side to
help you win out in the race.
Ding Yun
President of Huawei Customer
Solution and Sales Support Dept.
What’s inside:
P.34
P.17
Global Digest
14
01 Vodafone tags mobile Internet services
for revenue boost
China Mobile Zhejiang embraces
full-service operation
After gathering solid market research and meticulously
planning service, China Mobile Zhejiang has optimized
its networks and O&M systems to beat the competition
with innovative full-service operation.
03 GP, Huawei win”Green Mobile Award”at
GSMA Mobile Congress
By Hu Huangang
04 Frost & Sullivan recognizes Huawei
with three Best Practice Awards
Main Topic
17
Expert’s Forum
05
National broadband is on the way
National broadband initiatives are blooming across
the globe and transforming the telecom landscape. In
this context, a successful national broadband strategy
requires a mature ecosystem for future development
and a strong input from government.
The journey to convergence
France Telecom’s strategy and practice
By Damien Schaepelynck
By Chen Feng & Xu Hong
08
Transforming the FTTH and
broadband landscape in Japan
By Yukiyasu Sakamoto
21
Brilliant life powered by Smart City
By Chen Feng & Huang Ying
11
Bharti Airtel: catching the
broadband wave
By Yao Haifei
25
MSOs expand business horizons
By Chai Jiayong & Liu Yingke
Let’s COMMUNICATE beyond technology and share understandings of the latest industry trends,
successful operational cases, leading technologies and more. Based on in-depth analysis of the
matters that lie close to your heart, we will help you stay on top in the competitive telecom industry.
P.44
Network Strategy
Business Mode
27
P.39
Unlocking the secrets of SoftBank’s
3G success
SoftBank Mobile conducts the fastest 2G to
3G evolution in Japan. After the acquisition on
Vodafone K.K. in March 2006, the operator has
sustained leading subscriber growth rates for an
impressive 26 consecutive months despite a saturated
market and intense competition.
39
By Zhang Ping & He Zhichao
42
Building cost effective mobile
broadband networks
Mobile broadband services have seen increased traffic
but the revenues have lagged behind. Operators
need to adopt new strategies to build low-cost, highperformance mobile broadband networks.
By Zhou Jing
31
Synergies boost mobile broadband
Successful 3G operation in emerging
markets
By Chi Zhentao
By Pan Fei & Wei Mengjiang
Solution
34
Smart mobile broadband with
differentiated operations
44
By Huang Wangshun
37
Mobile broadband more than just a
price war
By Bai Ju
Mitigating interference between
LTE and 2G/3G networks
By Sun Jingfei
47
Bridging multinational operations
By Lin Peixing & Li Rong
GLOBAL DIGEST
News
KPN opens for German network sharing
Zain expands One network
any of these Zain countries.
KPN may consider network
CEO Ad Scheepbouwer talking at
Over 27 million Zain customers in
sharing with Telefonica O2 Germany
Morgan Stanley's TMT conference.
Bahrain, Iraq, Jordan, Kuwait, Saudi
The One platform allows
to share costs and wants to talk
Asked about the possibility of
Arabia and Sudan will benefit from
subscribers to make calls, send
with Telefonica about a joint bid for
merging the two businesses,
One Network services–effectively
SMS and access the data services
German digital dividend spectrum,
Scheepbouwer said both companies
being treated as local customers–
at local rates of the visited country
which will be auctioned in the first
would only sell if they got a high
when visiting Egypt, while Mobinil’s
and to receive incoming calls from
quarter of 2010, according to KPN
price.
24 million customers will benefit
their home country at free or
from similar treatment when visiting
minimal charge.
Orange to integrate Twitter into mobile service
In a pan-European move, but
tweets, chose a maximum number
launching first in the UK, Orange
of daily tweets and chose to receive
will integrate Twitter features into
updates in real time, hourly or daily.
its mobile service, allowing users the
ability to upload and share photos
with their Twitter followers via MMS.
SMS-based tweets will be rolled into
the standard mobile plan and users
will be able to set times for receiving
AT&T launches prepaid mobile broadband offerings
AT&T Mobility launched its own
earlier. AT&T is offering a daily
prepaid mobile broadband plans,
plan for 15USD with a cap at
weeks after rival Verizon Wireless
75MB of usage, a weekly plan
decided to jump into the prepaid
for 30USD with a cap at 250MB,
broadband market.
and a monthly plan for 50USD
The new plans, called
with a 500MB cap. AT&T said that
DataConnect Pass, work with
users will receive a text and email
all AT&T-certified netbooks and
message once either 30 minutes or
laptops. The pricing is identical to
20% of their allotted data usage
the plans that Verizon introduced
remains in a session.
Vodafone tags mobile Internet services for revenue boost
As operators around Europe
Vodafone 360.
DOCOMO plans environmental sensor network
N TT D O CO M O w i l l t r i a l a
It will begin a trial on
network of environmental sensors
December 21 using sensors in 300
to measure carbon emissions and
locations within the Kanto region
other atmospheric conditions.
surrounding Tokyo. If successful,
The Japanese operator said the
the network will be expanded to
sensors would be installed at its
2,500 locations nationwide by
mobile base station sites, creating
March 2011 and eventually to
the largest of its kind in Japan.
9,000 locations.
Quarter of broadband grant applications WiMAX-based
Of the 1130 applications
fund have set aside a total of 4
s u b m i t t e d t o t h e U S f e d e ra l
billion USD in grant funds with an
government for last-mile broadband
additional 3.2 billion USD available
stimulus funds, more than a quarter
for loans. In total the government
were filed by WiMAX operators
has received applications for
looking to capitalize on the program
28 billion USD in funding for all
to expand wireless access and mobile
broadband stimulus projects.
broadband services to underserved
Forum President and Chairman
areas, according to an analysis by the
Ron Resnick said that the high
WiMAX Forum. While many of those
turnout among wireless providers
applications were for rural projects,
shows that WiMAX has enormous
several of them came from familiar
potential in bridging the digital divide
names looking to expand access in
between competitive urban markets
the big cities.
and unserved and underserved rural
continue to report stagnant or
Vodafone Europe CEO, Michel
Though the number of
declining voice revenues, Vodafone
Combes, believes that additional
applications from wireless providers
has revealed it will be looking
revenues are needed to continue
was large, the amounts each
closely at methods to capture more
investment in the data networks,
requested on average was relatively
revenues from mobile Internet
but without simply becoming high-
small. Of the 14.212 billion USD
services. The company said that top
speed dumb pipes that would
in last-mile funds requested, the
of the list was the development of
continue to benefit the main
300 WiMAX applications totaled
premium services and micro-billing
winners in the mobile Internet
1.6 billion billion, according to
beyond what has already been
space, such as Google and other
the Forum. The NTIA and the US
launched or announced, such as
big search engines.
Department of Agriculture’s RUS
1 DEC 2009 . ISSUE 53
markets.
Data
New EU laws aim to cut prices, guarantee net freedom
1 billion
The European Parliament has
forced to compete fairly with smaller
Figures from Informa Telecoms
Safaricom’s m-pesa initiative in
approved a raft of new telecom
rivals or face having their networks
& Media show that data revenues in
Kenya, which analysts agree has
laws designed to give European
separated from their service divisions.
Africa increased 13% in the second
shown the way in mobile banking,
consumers cheaper telecom services,
“ T h e E U t e l e c o m s re f o r m
quarter of 2009 to reach over 1 billion.
as a revenue generator as well as a
more privacy and faster Internet
will bring more competition on
A good example of this is
access.
Europe's telecoms markets and
The laws broadly attempt to
put citizens in the center stage in
equalize telecom services across
telecoms regulation," said telecoms
Europe, with dominant operators
commissioner Viviane Reding.
Finland awards 2.6GHz licenses for LTE
Finland has awarded licenses
network in the first quarter of 2010,
in the 2.6GHz band for offering
while network roll-out will depend
LTE mobile services. Finnish mobile
on customer demand and the
operator Elisa said it was allocated
availability of compatible end-user
50MHz during the auction, which
equipment.
customer retention tool.
4 million
New research predicts that WiMAX
said, “With only 14 WiMAX chipset
chipset shipments will hit 4 million by
manufacturers this will put some
the end of 2009. Currently, there are
pressure on manufacturers with
14 WiMAX chipset manufacturers
insufficient customer traction, lacking
targeting the market.
funding or scale, or offering only partial
Adlane Fellah, Maravedis CEO
chipset solutions.”
87 million
was run by the regulator Ficora and
ended on 23 November.
LTE deployments will pick up
also thinks that HSPA technology will
The license is valid until 2029 and
over the next few years and lead to
have a long shelf life and will keep on
comes with a fee of 834,700EUR,
87 million LTE subscribers by 2014,
growing even as more operators begin
the company announced. Sonera
according to GSMA. However, GSMA
adopting LTE.
also acquired a 20-year license for
five blocks of 2x5MHz in the 2.6GHz
band, for 819,000EUR.
1st
The company expects to connect
its first customers over the LTE
Telus extends IPTV network in Alberta and B.C.
Telus Corp. is extending the
Telus TV is being marketed as
reach of its IPTV service in Western
an alternative to cable services.
Canada, making the broadband-
It offers hundreds of channels,
based television offering available in
including almost three dozen in HD,
Lethbridge and Medicine Hat, Alberta
as well as Video On Demand and
and Campbell River, British Columbia.
DVR services.
Vodafone creates SMS symphony for marketing campaign
The New Zealand division of
messages sent in a precise sequence
international cell phone giant,
to duplicate Tchaikovsky’s 1812
Vo d a f o n e , h a s l a u n c h e d a n
Overture.
Huawei has been assessed as
Vision, and "Very Positive" in
1st Tier in the global mobile market
Momentum, which means Huawei
in Q209 by Current Analysis.
wireless market has been generally
"Positive" in its Perspective and
recognized as Tier 1 by the industry.
42.5 million
Mobile broadband connections
UK will be 36.3 million, as well as 6.4
will exceed fixed-line broadband
million dongles/embedded devices,
connections in 2011, according
taking the total number of mobile
to a report to be released by
broadband connections to 42.7
mobileSQUARED. By 2011 the
million versus expected broadband
number of active 3G devices in the
Internet users of 42.5 million.
No. 2
innovative new marketing campaign
53 distinct ringtones were used
involving a symphony created
to create the Vodafone commercial,
Huawei grabs the No. 2 position
Dell'Oro. According to Dell'Oro,
entirely with SMS ringtones.
which was uploaded to YouTube
in the global mobile infrastructure
Huawei's market share nearly
and has already been viewed more
equipment market in the third
doubled to 20 percent, up from 11
than 200,000 times.
quarter, according to research firm
percent in the year-ago quarter.
The project involved 1,000
mobile phones and 2,000 text
DEC 2009 . ISSUE 53
2
Global Digest
Huawei News
Vodafone and Huawei open Core Network Innovation
Centre in Italy
Huawei receives Light Reading’s 2009 Top Picks Award
for its transport and router products
Shenzhen, China, 25 Nov, 2009
The CIC represents Huawei's
Huawei's OSN8800 NG-WDM
service operation, including Virtual
Vodafone and Huawei have opened
primary investment in core network
platform and NE40E universal service
Container (VC-x), Optical Data Unit
a laboratory in Milan, Italy to drive
technologies in Europe, with the
router were recognized as Light
(ODUk), lamda, future-oriented
core network innovation and to
project underscoring the company's
Reading's 2009 Top Picks in Carrier
packet services and cross-connection,
benefit customers.
close collaboration with the operator
Transport category and Switching and
this platform enables operators
community.
Routing category respectively.
to achieve greater flexibility and
The Core Network Innovation
Centre (CIC) in Milan is equipped
Livio Borgogno, Director of
"Congratulations to all the
with the latest Huawei mobile
Vodafone's global core network
companies and individuals who were
Huawei's NetEngine40E X -Series
and core network equipment and
competence centre, and Cai Liqun,
selected as this year's Top Picks,"
(NE40E-X3/X8/X16) universal service
technologies to boost innovation in
President of Huawei's core network
says Phil Harvey, Light Reading's
router (USR) is fully compatible with
core network solutions. Huawei and
product line, inaugurated the CIC in
Editor-in-Chief. "The Top Picks were
all existing NE40E router linecards and
Vodafone's collaborative research
Milan.
optimized wavelength utilization.
chosen by Light Reading's editors
the coming 100G linecards, resulting
will aim to give both companies a
" T h e C I C w i l l e n s u re t h a t
because they embody the trends
in best investment protection. By
competitive edge in core network
Vodafone is able to maintain its
that we feel are really pushing this
integrating SR, BRAS, video cache,
areas, such as mobile broadband, IP
position as an innovation leader
industry forward."
DPI on the same platform, the NE40E
Multimedia Sub-system (IMS) and
within the core network, so that our
The OSN8800 NG-WDM platform
X-series USR allows intelligence-on-
Fixed Mobile Convergence (FMC),
customers will continue to benefit
records a cross-connect capacity
demand, thus providing more services
eventually bringing new ideas to
from the latest technology to improve
of 2.56T, and is able to upgrade to
with better quality and shorter time-
fruition, enabling timely market
and enhance their communications,"
6.4T. With the capability to support
to-market, and significantly reducing
launches.
said Livio Borgogno of Vodafone.
40G and 100G transmission and full-
CAPEX and OPEX.
Grameenphone, Huawei win “Green Mobile Award” at GSMA Mobile Congress
or drive eco-friendly programs,
development of local societies," said
by its own operations. It was under
services and initiatives.
Tony Zhang, President of Huawei
that initiative that GP signed power
The winning entry by Huawei
Bangladesh. "Huawei will continue to
purchase and system procurement
and Grameenphone resulted from
pursue and deliver cutting-edge, cost-
agreements for renewable energy
their partnership in 2008, called
lowering green solutions for all of our
with Huawei.
"Building a Greener Mobile Network,"
operator customers in Bangladesh
to transform a legacy mobile core
and around the world."
network in Bangladesh into an
Grameenphone Ltd., jointly with
environmentally friendly network.
Huawei is dedicated to the
continuous development of
Commenting on the award,
constantly enhanced green
the Grameenphone CTO said that
solutions for energy efficient and
Huawei, has won the "Green Mobile
Mr. Frode Stoldal, CTO of
"Grameenphone is very committed
environmentally friendly networks
Award" at the GSMA Mobile Awards
Grameenphone, and Mr. Tony Zhang,
towards the ‘Green‘ revolution in
around the globe. These innovative
2009. The award was announced
President of Huawei Bangladesh,
everything it has been doing over
solutions aim to help operators
during the GSMA Mobile Congress
jointly accepted the award on
the last few years. This award is
optimize energy efficiency, maximize
2009, held in Hong Kong 18 and 19
behalf of their respective companies.
only indicative of the role that
their return on investment, fulfill their
November 2009.
Also joining Grameenphone at
a mobile company can play in
social responsibilities, significantly
The "Green Mobile Award"
the ceremony was Mr. Jon Fredrik
the development of low carbon
reduce the TCO in the product
was developed to promote the
Baksaas, President & CEO of Telenor
economies, industries and lifestyles."
life cycle, and enhance market
"going green" initiatives and for
AS, representing Grameenphone's
organizations in the mobile industry,
largest shareholder Telenor Group.
Grameenphone's environmental
competitiveness. To date, Huawei's
roadmap aimed to promote a low-
green solutions have been adopted
as well as organizations outside of
"We are honored to be recognized
carbon society, and GP's first priority
by leading telecom operators around
the industry that utilize the mobile
for our contribution to environmental
was to take responsibility for the
the world, including GP, Vodafone,
platform to communicate, innovate
protection and the sustainable
excess of CO2 emissions generated
Warid, and China Mobile.
3 DEC 2009 . ISSUE 53
Frost & Sullivan recognizes Huawei with three Best Practice Awards
670.0 million USD in Q2 of 2009. It
system, innovative business, in-depth
and create more values. In the
is forecasted that the market size of
comprehension and practice," said
contact center market, Huawei IP
worldwide unified communications
Dr. Neil Wang, Frost & Sullivan China
contact center solution provides the
will exceed 700 million USD by the
General Manager.
contact center platform and rich
end of 2009 along with 340 million
Huawei eCity Digital City Solution
services such as customer service,
USD as revenues of worldwide
as the integration of Internet
marketing promotion, information
communications hardware market.
technology, the Internet of things
directory service, and recharging.
Shenzhen, China, 18 Nov, 2009,
Given the still nascent nature of the
technology, and telecom network
Regardless of user's limited Total Cost
Huawei received three Frost & Sullivan
unified communications applications
technology could construct unified
of Ownership, Huawei IP contact
Best Practice Awards, including 2009
market, we expect to see solid growth
digital city management system.
center solution could assist users
Digital City Solution Innovation of the
rates for several years to come.
Huawei unified communication
by improving customer satisfaction
Year, 2009 Unified Communications
2009 Digital City Solution
solution which supports the future-
and loyalty. Hence, Frost & Sullivan
Solution Innovation of the Year, and
Innovation of the Year is introduced
oriented IMS network framework,
recognizes Huawei Software with
2009 Multimedia Contact Center
to China for the first time to honor
has rich product series that include
2009 Unified Communications
Solution of the Year at Frost &
the excellent solutions in the
IP phone, IP-PBX, integrated Assess
Solution Innovation of the Year, 2009
Sullivan Enterprise Communication
interest of city informationization.
Gateway, Unified Message Server to
Multimedia Contact Center Solution
Summit and Award Ceremony 2009
"Huawei eCity Digital City Solution
help users build IP Telephony System.
of the Year. In-depth interviews,
in Shanghai, China.
has occupied a leading position
According to different requirements,
analysis, and extensive secondary
Revenues for the worldwide unified
in the industry on the basis of its
users could choose Huawei's different
research are done to identify best
communications markets reached
advanced technical framework, open
solutions to build customized system
practices in the industry.
Huawei deploys world’s first TD-LTE trial network for 2010
Shanghai World Expo
Huawei shares vision of All-IP mobile broadband
evolution at Asia Pacific CTO Forum 2009
Beijing, China, 13 Nov, 2009,
(HD) video transmission, HD video
Hong Kong, China, 17 Nov, 2009,
2 billion, including 1.6 billion
Huawei announced the deployment
monitoring, HD video-on-demand
Huawei discussed its views on the
new subscribers, representing
of world's first TD-LTE/SAE trial
(VOD) and mobile Internet will
future of mobile broadband at the
growth of more than 80 percent.
network for China Mobile. This new
support the live broadcasting and
third annual Huawei Asia Pacific CTO
However, according to Informa
network with an actual download
security for the coming events.
Forum in Hong Kong. More than 150
Telecoms & Media, global mobile
"TD-LTE/SAE technologies with
senior executives representing over
data network traffic will grow
speed of up to 29Mbps will be used
for 2010 Shanghai World Expo.
the advantage of low latency and
60 telecom operators from around
by 1,587 percent between 2008
Wang Jianzhou, Chairman and
high spectrum efficiency are getting
the region participated and engaged
a n d 2 0 1 3 , w h i l e re v e n u e i n
Chief Executive Officer of China
increasingly more recognition from
in collaborative discussion on how to
this space will grow by only 83
Mobile, said, "This state-of-the-art
operators and telecom organizations,"
address pressing industry challenges,
percent over the same period. To
network covers the whole site of
said Li Changzhu, Vice President of
with a focus on the evolution of
offset this imbalance, operators
2010 Shanghai World Expo, which
China Marketing, Huawei, "As most
mobile broadband.
will need to adopt evolutionary
will fully demonstrate the capability
of the significant technical innovations
Huawei led this discussion,
technological solutions to decrease
of TD-LTE technology."
will be showcased during the Expo,
providing new insights on
their cost per megabit and ensure
As the only vendor able to
this TD-LTE/SAE trial network is one of
its forecasts for the future
a smooth transition to a next-
provide end-to-end TD-LTE/SAE
the most exciting innovations during
development of mobile broadband,
generation network. Towards this
solutions, Huawei deployed the TD-
the event. This network adopted
as well as working with operators
end, Huawei identified increasing
LTE radio access network and SAE
Huawei's integrated LTE solution of
to determine how they can best
network efficiency and moving
core network for China Mobile, and
FDD and TDD technologies, as well
leverage the rapid growth of
to a converged network as the
delivered chipsets and terminals.
as the SAE core network which is
this sector. Huawei predicts that
key drivers and differentiators
These infrastructures and terminal
being used in world-leading operators'
by 2013, the number of mobile
for operator success in mobile
devices enabling high definition
network modernization."
broadband subscribers will exceed
broadband.
DEC 2009 . ISSUE 53
4
Expert’s Forum
The journey to convergence
France Telecom’s strategy and practice
The journey to convergence
By Damien Schaepelynck from FT
France Telecom (FT) began its convergence journey in
2005 with the aim of delivering new telecom experiences
through NExT. In 2009, the success of NExT and FT’s
business transformation are evident and impressive.
Damien Schaepelynck, the Director of Marketing &
Service Development at Orange Labs Beijing, describes
NExT, the convergence experience, and Unik, an example
of FT’s FMC service.
5 DEC 2009 . ISSUE 53
Huawei Communicate
Mr. Damien Schaepelynck is Director of Marketing & Service Development, Orange Labs Beijing. With
degrees in mechanical engineering, electronics, and informatics, Mr. Schaepelynck has 15 years experience
in the telecom industry.
A world presence
O
perating under the wellestablished commercial brand
of Orange, France Telecom is
one of the world’s major telecom
enterprises. Its 2008 revenues reached
€53.5 billion and, notably, half of this was
generated outside of France, compared
with just 3% in 1996.
France Telecom currently serves 182
million customers, more than two-thirds
of whom are under the Orange brand.
France Telecom’s market activities are
strongly balanced among countries in
Europe, Africa, and the Middle East and
cover 121 million mobile customers in 30
countries, ranking us as the third largest
operator in Europe. France Telecom has
the most customers in Europe for fixed
lines, ADSL and VoIP. In the corporate
market, our Orange Business Service
provides services for two-thirds of the
world’s leading multinationals across 220
countries and regions.
NExT move
The world of telecommunications is
changing. Powered by ever intensifying
competition and the technological
capability to carry all types of content across
one network, industry and enterprise
boundaries along the IT and telecom value
chain are beginning to blur. Innovation
in terms of products and services has
accelerated, and global companies such
as Google and Skype can provide telecom
type of services without owning networks.
This new world has forced the incumbents
to rethink their way of doing business.
What’s NExT?
In 2005 France Telecom implemented
the new NExT strategy which aims at
offering subscribers a new experience in
telecom services. We realized that the new
business climate meant more than just
providing our customers with network
access; we needed to give them ubiquitous
services that offered the same experience
re g a rd l e s s o f l o c a t i o n o r t e r m i n a l .
Customers don’t think about networks or
technology; they simply want a decent end
experience from a given service. Of course,
the service must be convenient and easy to
use. This inevitably requires more complex
technology, which needs to be hidden
from the customer.
Why convergence?
Is the market ready for convergent
services? Orange’s market study conducted
in 2006 tells us yes it is. First, we’re
seeing increased customer demand for
multiple service packages. In Europe the
penetration rate of the four services in the
same household–fixed phone, broadband,
pay TV and mobile–climbed from 16%
in 2006 to 35% in 2008, although access
during this period involved more than
one service provider. In 2008, 63% of
European households received mobile
and broadband services; of these, 66%
expressed a preference for bundled services
and between 10% and 15% said they’d
consider opting out their existing contract
for mobile and broadband bundle. So,
there is a clear market demand for bundled
services and this approach is an effective
way for operators to attract customers, not
just retain them.
It’s also impor tant to know what
customers expect from bundled services.
DEC 2009 . ISSUE 53
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Expert’s Forum
The journey to convergence
The first thing is simplicity; 42% of
the households receiving mobile and
broadband services state they want a single
bill, customer service, loyalty program,
and portal. The second key feature is
value. Offering a convergent service in a
pure bundle is equivalent to a 20% price
discount. Bundled services are therefore a
great way for customers to receive better
and simpler services at a lower price.
Implementing convergence
So, how can we implement
convergence? By focusing on content,
networks and organization.
We decided that content should be
available on PCs, TVs, and mobile phones.
By offering content everywhere, we can
differentiate ourselves from our access
competitors and provide targeted services
to maximize revenues.
We’v e n o t o n l y t r a n s f o r m e d o u r
service provision methodology, but also
our business model. One way we’re
achieving our targets is by capitalizing on
Livebox and promoting its wider use as a
central feature of our home-networking
convergence strategy. Through Livebox,
we provide access to fixed phones, VoIP,
TV, and Wi-Fi for mobile phones. It
also forms a music, radio, games, and
web service system, and is therefore an
excellent integrated home service platform.
Naturally, we need high-quality content
f o r L i ve b ox . At t h e m o m e n t , we’re
collaborating with content providers to
increase our value and aggregate content,
which we deliver through our networks.
We prefer to work in partnership rather
than produce content ourselves–our
networks and strong corporate foundation
make us an attractive partner.
We’ve signed agreements with all the
major TV channels and some movie
channels. We also provide sport content
such as French Football League matches,
which is extremely popular with our
customers.
Network convergence is integral to the
provision of convergent services. We’re
expanding our network capacities to offer
ubiquitous broadband, including the
expansion of ADSL, ADSL2+ and the predeployment of FTTH. We’ve deployed
7 DEC 2009 . ISSUE 53
3G and 3G+ for mobile broadband and
mobile multimedia. We intend to infuse
our networks with intelligence, part of
which involves an adaptable and efficient
information system that provides the
right services at the right time and at the
right quality. Growth programs account
for 36% of our recent asset investments,
including fiber optics, content, new usage
platforms, broadband networks in mature
markets, and network deployment in
growing markets.
Finally, giving customers a seamless
e x p e r i e n c e i n vo l ve s o r g a n i z a t i o n a l
reshuffling in order to accommodate a
huge range of tasks. An important goal for
us is to enhance our distribution channels.
Customers expect an integrated experience
at stores and online. Call centers and
customer care divisions have to provide
clear and consistent processes for fixed,
Internet, TV, and mobile services.
Unik: a concrete example
Unik is our FMC service and, to date,
1.6 million Orange customers now use Unik
handsets. Interestingly, we’ve found that onethird of all mobile calls are made at home
and over 40% are made at work. In this
sense, a mobile phone is not just a mobile
tool–it’s a personal phone that people prefer
to landlines. Similarly we’ve been surprised to
find that over a third of mobile TV is viewed
at home, which contradicts our expectation
that this would be a service for people on the
move, when traveling, and so on. Based on
this, we developed Unik.
What is Unik?
Unik is a mobile phone that works
on GSM or UMTS networks outside
the home. At home, it uses Wi-Fi to
automatically connect to Livebox or other
home gateways to provide VoIP at a flat
rate with better indoor coverage.
Unlicensed mobile access (UMA)
technology makes this possible by allowing
GSM and GPRS mobile traffic to be
carried over an IP network. UMA was
introduced into the 3GPP standard as
generic access network (GAN) in 2005 and
simply requires customers to have a mobile
subscription, a UMA-compatible phone,
and broadband access. Many phones are
now compatible with UMA; last year we
released Unik with the first 3G UMA
service, opening a new world of multimedia
services for our Unik customers.
Unik value and opportunities
Unik provides a high quality customer
experience with many benefits–it’s easy to
use, cost-effective, and seamlessly switches
format. Unik also generates solid revenues
for Orange in a way that integrates fixed
and mobile charges, reduces churn levels,
increases our customer base, and raises
fixed ARPU.
The service also helps boost broadband
subscriptions–when we launched our
Net & Unik package in France as an
add-on to the postpaid mobile talk plan
package, over 80% of our customers also
became broadband subscribers. At that
time, we were focusing on attracting new
broadband subscribers, and Unik met this
need. When a service creates benefits for
customers and value for operators, a true
win-win result is achieved.
Going beyond voice
Our future emphasis will be on
promoting convergent services. Firstly,
we will expand our VoIP service for Unik
subscribers to allow access through any
Livebox, for example, at a friend’s house,
like we are doing on our Wi-Fi hotspots.
Secondly, we’re promoting faster music,
games, podcast downloads, and user
generated content. The Unik can also be
used as a remote control in a digital home–
users can share and access music, photos
and videos on any home device. Beginning
with Unik, we’re exploring the wide range
of possibilities that convergence can deliver.
Telecommunications is changing and
in turn we need to change the way we
think and do business. So far, we’ve been
successfully implementing convergence
strategies that have created great value for
us and customers. As we expand, these
must be adapted to the different markets
and environments of other countries.
A common thread, of course, is that
operators need the strength to find their
own way forward.
Editor: Long Ji [email protected]
Huawei Communicate
NTT West
Transforming the
FTTH and broadband
landscape in Japan
By Yukiyasu Sakamoto from NTT West
DEC 2009 . ISSUE 53
8
Expert’s Forum
Expert’s Forum
Mr. Sakamoto has served as Director of the Global Business Office at NTT West since July 2009, responsible
for international business development and activities of his company. In the course of dramatic growth in the
Internet and broadband, Mr. Sakamoto has held a variety of managerial positions at NTT West.
Japan is home to one of the
most mature and competitive
broadband markets in the
world. NTT West (a subsidiary
of NTT) has a strong foothold
as a provider of regional
telecom services in western
Japan. Yukiyasu Sakamoto,
the Director of the Global
Business Office, Technology
Innovation Department at NTT
West, delineates the company’s
broadband strategy for service
development and network
deployment.
Spread of FTTx in
broadband market
F
i r s t , l e t m e i n t ro d u c e Ja p a n’s
broadband market as a whole. By
the end of fiscal year 2008, there
were approximately 15 million
FTTH customers, ranking Japan second
after China (Source: Point topic Ltd). This
is remarkable considering the country’s
relatively small population.
When you compare the broadband
access cost in Japan, it is the lowest in
the world at 0.07USD/100Kbps as
compared to 0.49USD in the United
States. The reason for the low access cost
is mainly due to fierce competition with
other broadband operators and our cost
reduction efforts. It leads more customers
9 DEC 2009 . ISSUE 53
to use broadband service.
Let’s take a look at our broadband
market by services. As of March 2009,
the country had a 57.3% broadband
penetration rate for households. If we
split the penetration by service, FTTH
is number one with a penetration rate
of 28.4% vs. 21.2% for DSL. Over the
period between March 2008 to March
2009, FTTH increased at almost 20%
while DSL decreased by 8%. So it’s fair to
say that FTTH is and will be the major
service in Japan for broadband usage.
Focus on fiber-based
broadband services
NTT West is fully owned by NTT. Our
business areas encompass fixed telephones,
ISDN, ADSL and FTTH. But, we are
not allowed to provide Internet service
or content. We have a total subscriber
base of 28 million. As of March 2009,
PSTN customers accounted for 18 million
and FTTH customers accounted for 4.8
million. FTTH customers exceeded 5
million in May 2009. In western Japan
where we operate, broadband penetration
by household is 54.7%, of which 26.7% is
FTTH and 19.6% is DSL. This is slightly
lower than average in Japan, because
Tokyo, capital city of Japan, is not NTT
West’s coverage.
Shrinking of analog telephone
market
Our revenue is declining, due to the
shrinking analog telephone market. At
NTT West, revenues from analog telephone
and ISDN traffic decreased dramatically
by more than 80% over the last 8 years.
Such drastic shrinking of analog telephone
market is caused by a growing demand for
mobile and IP-based telephone services and
lending subscriber lines to other carriers.
But, we have to survive as a single entity.
So, we decided to make a shift for FTTH
broadband.
As I mentioned, even in the western
part of Japan, the FTTH market accounts
for almost 50% of the total broadband
market. But honestly speaking, we are
gradually facing difficult times. It took
us just 11 months to grow the FTTH
customers base from 2 million to 3
million and 10 months from 3 million
to 4 million, but it took us one year to
add another 1 million to 5 million. The
slow customer acquisition rate is mainly
due to economic situation and severe
competition.
Transition of FLET’s service
We h a v e a g g r e s s i v e l y d e p l o y e d
generations of FTTH services, including
NGN service. We named our broadband
service FLET’s, combining the letter “F”
with the word “Let’s” (from our “Let’s IP
Service” slogan). The “F” symbolizes key
service benefits, flat rate service, friendly
Internet access and a flexible environment.
Our latest FTTH over NGN service
was launched in March 2008 under the
new brand, FLET’s Hikari Next.
It p r ov i d e s t h r e e t y p e s o f u s a g e
–100Mbps service for residential users in
detached house (“Family-type”), 100Mbps
service for residential users in condo
(“Mansion-type”) and 1Gbps service
for enterprise users (“Business-type”).
In addition to broadband access using
high-speed optical fiber access line, our
NGN service features guaranteed QoS,
Huawei Communicate
triple-play, security functions as standard
features, easy set-up and integrated
terminals. We are still rolling out our
NGN service. At the end of fiscal year
2010, we aim to cover all of existing fiber
areas, equivalent to 90% of households.
Promotions at initial stage
When we first launched the fiber service
seven or eight years ago, we encountered
some obstacles from customers who
regarded fiber access unnecessary as no
applications needed such a wide bandwidth.
In view of this, we promoted our FTTH
service tactically. We started targeting
narrow broadband users and introduced a
flat rate plan. Our idea was to give them an
opportunity to enjoy broadband.
We s e t u p a s p e c i a l s i t e c a l l e d
FLET’s Square, an exclusive web site for
customers who have subscribed to our
broadband service. The site has contents
such as cinema, music and community
information and a lot of free services. This
enhanced our FLET’s service and attracted
subscribers.
We then sold our FTTH service to
existing DSL customers with an appealing
bundle of IP telephony service. You may
find this interesting. But in Japan, the
tariff is increased according to distance.
Once our customers switch to the fiber
network and subscribe to our IP telephony
service, they can make calls at a very
attractive price, no matter the distance.
Cultivating new markets
We are now cultivating new markets in
three ways.
First, we have an alliance with Nintendo
so that for non-PC users, a Nintendo game
console can be connected to our network
with the assistance of the special contact
window and the team for set up.
Second, we pay great attention to
customer ser vice. We set up special
subsidiaries for home network in 2007
that promised fast and quality installation
service, not only for fiber, but also setting
up links to our network with PCs or nonPC devices.
Third, is about video services over fiber
optics. NTT West is working to address
customer needs. Our “FLET’s TV” enables
“FLET’s Hikari” subscribers to view digital
broadcasts and Video On Demand at very
reasonable price.
Development of human resource is
another issue for shifting from telephone
company to broadband company. To
change our employees’ mindset and let
them acquire necessary skill for broadband
service, we initiated an e-learning program
called Broadband Experience Learning. In
this program, employees could proactively
experience and learn the broadband
environment by themselves.
Moreover, we also had an in-company
campaign award to increase sales staff
motivation. The sale of a fiber related
service is given priority in performance
evaluation among regional branches.
Future ahead
NTT group is striving to generate
profit from fiber-optic services (fiberoptic access plus NGN and the existing
IP network) on a single-year basis with
a target of fiscal year 2011. The positive
outlook is based on the revenue growth
by enhancing and diversifying of services
through NGN commercialization based on
customer needs, pursuing efficient capital
investments according to demand, and
spending sales-related expenses efficiently.
Trends and challenges of NGN
Let me outline the main steps in our
network evolution.
We started with a fiber optics network
called B Flet’s in 2001. At that time, we
used BPON technology. We upgraded the
network to an IPv6 network called Flet’s
Hikari Premium four years later and now
to the cutting-edge NGN network.
At present, the biggest issue for us both
technically and strategically is migration. We
offer various services on different networks
which are PSTN, IPv4 and IPv6 network.
To reduce cost, mainly operational cost, we
plan to migrate all our services to NGN.
As to a detailed execution plan, the NTT
Group will make a public announcement in
2010 as to how to migrate.
In addition to migration, the green issue
is also on top of our agenda. Along with
rapid growth of the Internet market and
increase of IP related equipments, power
consumption is increasing. We need to
change this trend. So, we aimed to decrease
the total amount of CO2 emissions more
than 15% per subscriber until 2010
comparing with year 2000. To achieve
this goal, we are focusing on power saving
technology in four technical areas: home
network, ICT equipment, air conditioning
and power feeding. Specifically, we think
that the virtualization of storage and the
network is important to reduce costs and
save power.
Business strategy
In the future, our main business will
still be NGN. Based on NGN service,
we will also expand our business scope to
cover home networking, mobile content,
data center, digital signage, or packaged
sales to small offices, etc.
Let me give some examples. Regarding
the service network interface (SNI),
collaboration between the NGN and
application service (SaaS)/platform services
which are provided by our group companies
and partners is promoted. When it comes
to the user network interface (UNI), we will
explore applications in various scenarios,
such as tele-working, health care, home
security and home entertainment. For
instance, we have made arrangements with
educational program service providers to
provide an e-learning service.
I’d also like to introduce one of our
unique mobile content services offered
by NTT West group company. NTT
SORMARE has the largest market share
in the field of mobile comics and the
most titles, including popular comics like
Hokuto-no-ken. SORMARE’s strengths
lie in our technical and business expertise
in editing e-comics and running site
operations, the largest number of Manga
titles and a strong, trusted, recognized,
nationwide brand.
In conclusion, NTT West will focus
our business on fiber-based broadband
services, exploring innovative services
and upgrading our NGN network. We
are confident in our ability to favorably
transform the FTTH and broadband
landscape in Japan.
Editor: Zhu Wenli [email protected]
DEC 2009 . ISSUE 53
10
Expert’s Forum
Bharti Airtel: catching the broadband wave
Bharti Airtel: catching the
broadband wave
The Indian telecom market has taken center stage thanks to strong growth in the mobile market. Yet, in the eyes of the
country’s largest mobile operator, Bharti Airtel, fixed broadband is an equally promising market replete with opportunities.
Mr. Shankar Halder, the Group CTO of Bharti Airtel Access Networks, describes the company’s ambitions in the fixed
broadband field and the domestic challenges the company must overcome.
By Yao Haifei
11 DEC 2009 . ISSUE 53
Huawei Communicate
Mr. Shankar Halder is the CTO of Access Network Group of Bharti Airtel Limited. He has over 26 years
serving for Indian telecom industries and deep involvement in many international industry bodies ITU-T,
GSMA etc. Mr. Halder received his degree in Electronics and Communication from Bengal Engineering
College, Calcutta University.
Broadband: the next wave
COMMUNICATE: Bharti Airtel
is well-known to us for its dominant
position in the Indian mobile arena, but
this is not so for fixed. Could you first
introduce your fixed network business?
Mr. Halder: The Indian fixed network
market is currently dominated by the
incumbent operator; out of the 37.54
million fixed lines, 88% are owned by the
government operators, BSNL and MTNL.
In the private sector, Bharti Airtel has the
largest share, with 3 million fixed lines, out
of which 1 million deliver our broadband
connection. It is worth noting that Bharti
Airtel ranks second only to BSNL in the
fixed broadband sector. Putting this in
context, we’re the second largest operator
in the whole fixed network market.
COMMUNICATE: According to your
observations, what are the major trends
in broadband demand and usage?
Mr. Halder: One thing is very clear–
there is a huge demand for broadband.
By the end of 2008, broadband
subscriptions accounted for 43% of all
Internet subscriptions, up from just over
30% at the end of 2007. The number of
broadband subscribers increased by 76.5%
in 2008 to reach 5.5 million at the end of
the year, equivalent to a penetration rate of
0.5%. So, we believe there is huge growth
potential for broadband, the need for
which primarily derives from high speed
Internet.
More than two-thirds of users belong to
computer savvy Generation Y who, at under
30, typically download movies and songs.
The Internet usage has grown beyond email
and chat to accommodate online games,
location applications, social networking,
and P2P file sharing. As these applications
become central to social and economic life,
so is broadband. While cacheable traffic–
the web, the Internet, and video to PC–
will remain a significant part of the total
Internet pipe, we know that P2P traffic is
on the rise and thus forms the next target.
COMMUNICATE: We’ve also noticed
that, in 2008, broadband grew by 24%
in India, while fixed-line shrank by 4%.
How do you see the future of voice, and
what is Bharti Airtel’s strategy to balance
voice and broadband development in an
overall fixed network business strategy?
Mr. Halder: I believe that broadband
is the next telecom wave in the same
way that mobile has been in India. We’re
doing relatively well with voice, and our
customer base is actually growing, despite
current market trends. However, the future
of traditional voice is uncertain–it may or
may not survive in the correct form. As we
move forward, voice and broadband will
be hosted by IP, with VoIP as just one of
many broadband applications.
This places broadband as our main
driving force. Over the past four years,
w e’v e m a d e c o n s i d e r a b l e g a i n s i n
broadband, and our vision is to cultivate,
expand, and dominate the broadband
market.
Network deployment and
transformation
C O M M U N I C AT E : C a n yo u
i n t r o d u c e Bh a r t i A i r t e l ’s c u r re n t
broadband service portfolio?
Mr. Halder: In In d i a , we d e f i n e
broadband as access speed above 256Kbps.
As customers begin using it for multiple
applications and become more familiar
with the experience, the demand for
b a n d w i d t h i s g r o w i n g c o n s t a n t l y.
Therefore, we’re progressively migrating to
512Kbps and higher speeds.
We’re fortunate in that we’re younger
than the incumbents, meaning that
our opportunity to deliver high speeds
based on network capability is higher.
Technologically, our network is now 100%
compliant with ADSL2+. In 2008, we
launched 8Mbps, which is now available in
25 cities, and in 2009 we released 16Mbps
in three major cities, with plans to cover
four more. By the end of 2009, we intend
to introduce high speed connections
reaching 30Mbps using VDSL2 in selected
areas.
COMMUNICATE: What are the
m a i n a c c e s s t e c h n o l o g i e s i n yo u r
network, and what are your plans for
moving forward?
Mr. Halder: Our access network is
currently purely based on copper. Over
the past 2 to 3 years, we realized we have
to provide a high speed experience, and
therefore decided to deliberately limit
copper length. Fortunately, our company’s
youth yielded positive results–about 75%
of our copper lines are between 1 and 1.5
kilometers.
At the moment, we don’t have GPON
or EPON, though we’re looking at which
technology is the most suitable, how to
proceed, and when to deploy. GPON
seems to be more widely accepted in
future over EPON, though it’s essential to
view related economics in terms of CPE
costs and the provision of a solid business
strategy. In addition, we must plan the
applications that we intend to deliver in
DEC 2009 . ISSUE 53
12
Expert’s Forum
Bharti Airtel: catching the broadband wave
advance.
Eventually, copper deployment must
decrease and logic dictates that we need
to accelerate fiber access deployment. We
expect to trial GPON in 2010 on a limited
basis, and it’s my guess that our fiber
GPON deployment won’t exceed copper
until 2011 or 2012.
C O M M U N I C AT E : U p g r a d i n g
access technology alone is not enough
to guarantee a superior customer
experience. How is Bharti Airtel going
to transform its network to deliver its
promises?
Mr. Halder: We’re fully aware that a
transformation will also take place in terms
of customer focus and the new services
we will deliver. With this in mind, we’re
redefining our access, transport, and core
networks and, for the past 2 years, we’ve
worked with our partners, invested huge
sums of money, and adopted a long-term
approach to transform our network.
Our main focus at the access layer
involves building a multi-service network
that supports triple-play. We’re also keen
to buy all the access nodes that support
VDSL2, so that we can offer high speed
by simply adding a card. Secondly, we’re
aware that if we’re going to support high
speed via fiber access in the future, we need
a strong, carrier-grade IP infrastructure in
the metros. We’ve implemented a carrier
Ethernet network over the past few years
for major cities, with the intention of
providing ultra-high speed Internet access,
triple-play, and enterprise services. Huawei
partnered with us to deliver our Ethernet
with full IP backbone in Mumbai, which
was just launched in September. We
now plan to construct a Carrier Ethernet
network covering India’s seven key cities
by March 2010.
Most importantly, we believe that the
metro bearer network must inevitably
be a converged fixed-mobile transport
network that supports all kinds of access
technologies, including WiMAX, HSPA,
LTE, DSL or PON. This network will
not only carry high speed Internet traffic,
but also backhaul mobile traffic, which is
especially relevant for 3G and the arrival of
LTE.
At the core, we’ve shifted from TDM to
13 DEC 2009 . ISSUE 53
NGN, and the next step will be to evolve
to IMS from NGN.
We’ve chosen a holistic approach to
network transformation and this embodies
our requirements for a robust, scalable and
cost-effective future network.
Challenges ahead
COMMUNICATE: Being a young
fixed operator gives you both advantages
and disadvantages. One aspect is that
you must build your own copper and
fiber network. What challenges will you
face doing so?
Mr. Halder: Our copper resources are
much less than the incumbent’s, which
is exacerbated by the lack of Local Loop
Unbundling in India. The main challenge
in our country is obtaining the necessary
right of way (ROW) permission to lay
fiber and copper lines to connect to the
customer. This presents two problems:
the first is time–permission must be
sought from a number of authorities to
lay cables, which lengthens the process
considerably. The second is cost–already
h i g h a n d i n c re a s i n g ROW f e e s c a n
account for as much as 50-60% of total
access construction expenditure. The two
problems are magnified if repeated digging
work is required to expand and enhance
the network.
Building entr y doubles the ROW
issue. Examples include difficulties in
obtaining permission to enter high rises,
as construction companies or Resident’s
Welfare Association (RWA) are to be paid
to give entry rights to a building. Even on
successful entry, building work and wiring
have to be re-done for 90% of the time
because of poor quality of the existing
wiring.
Low ARPU intensifies these problems.
Broadband ARPU is currently 13USD to
14USD, but will drop to maybe 10USD
in the near future. As a company that
always prioritizes quality, we believe that
an ARPU fall does not mean that we’ll
offer customers a poor quality. While
ARPU is coming down from the customer
perspective, QoE expectations are rising,
and we’re focused on maintaining high
quality at all time.
The above challenges coupled with low
ARPU preclude mass wireline rollout by
private operators.
COMMUNICATE: We understand
that, in many emerging markets,
terminals can be a hurdle to broadband
development. How does Bharti Airtel
view this issue and how will you address
it?
Mr. Halder: Obviously, there’s a
lag between network development and
terminal maturity. From the outset, the low
PC penetration rate has formed a massive
hill for broadband to climb, though we’re
pleased with current progress in CPE.
Nevertheless, efforts are still needed to
expand the ecosystem as a whole. Airtel’s
ADSL2+ is already well-established, with
multiple CPE vendors available. Prices
have decreased over the years and are now
fairly competitive at around, for example,
20USD for an ADSL2+ modern with WiFi connectivity.
Mo re ov e r, w e n e e d a re s i d e n t i a l
gateway that can connect all devices rather
than a stand-alone ADSL2+ modem.
This gateway can allow homes to be
connected and intelligent. This is a crucial
developmental opportunity that needs
the concerted efforts of all for guaranteed
quality, and reasonable price; we cannot
grow if the CPE is too expensive. This is
especially true for GPON–a 100USD+
CPE will just not work. This is the reason
that we’re in actively trying to figure out
with vendors how and when the economies
of scale will take off.
COMMUNICATE: A s we know,
broadband development now mainly
focuses on India’s 25 largest cities. How
can Bharti Airtel promote broadband
in rural areas and with which viable
technologies?
Mr. Halder: We strongly believe that
fixed broadband through copper or fiber
will predominantly apply to urban areas
based on deployment costs. Other than
the incumbent’s, the copper presence in
urban areas is very low. Therefore, wireless
technology, particularly WiMAX/HSPA, is
necessary to boost penetration in rural and
suburban areas.
Editor: Gao Xianrui [email protected]
Huawei Communicate
Hu Huangang: General Manager and Senior Engineer of the Network Department of China Mobile Zhejiang.
With 16-year experience in the telecom field, he previously was the General Manager of the Planning and
Technology Department at China Mobile Zhejiang.
China Mobile Zhejiang embraces
full-service operation
After gathering solid market research and meticulously planning service, China Mobile Zhejiang has optimized its networks
and O&M systems to beat the competition with innovative full-service operation.
By Hu Huangang, from China Mobile
DEC 2009 . ISSUE 53
14
Expert’s Forum
China Mobile Zhejiang embraces full-service operation
Focus on full-service
operation
F
ull-service operation is the
third development wave in the
telecom industry after mobile and
broadband services.
The biggest advantage of implementing
full-service operation for China Mobile
Zhejiang is to develop and extend
service areas. Although dominant in the
individual mobile service market, we are
relatively inexperienced in construction
and operation of fixed networks. The lack
of last mile fixed access for government,
enterprise and household customers
created an urgent need to unclog the fixed
network bottleneck and accelerate the
convergence of fixed and mobile networks
and services.
With a decided technical edge, we have
innovatively blueprinted and tailored our
practices for full-service operation. Based
on customer requirements and fixedmobile convergence, we are positioned to
help government and enterprise customers
slash communication costs, improve
efficiency, while enhancing their corporate
images.
In 2008, we took a critical step towards
the transformation to full-service operation
with the successful deployment of the first
domestic IMS commercial network.
After a year’s worth of continuous input
and commercial application, we forged
an efficient network for IMS and GPONbased full-service differentiated operations,
putting us on the cutting edge in China,
the world’s most populous telecom market.
Market research and
service planning
China Mobile Zhejiang prioritizes
government and enterprise customers,
followed by household and individual
customers for full service operation. To
enhance competition and tailor better
services, we first research enterprise
customer needs and expectations, together
with their service scenarios and application
bottlenecks. We conducted research on
15 DEC 2009 . ISSUE 53
Service inquiry
Project design
Project audit
Project engineering
Service provision
Fig. 1 Service handling process
Customer complain
or fault detection
Fault analysis
Maintenance
schedule
Troubleshooting
Fig. 2 Complain handling process
more than 60 enterprises in the province,
gaining valuable network knowledge and
are now promoting full-service products.
Research shows that for fixed voice
services, enterprise customers first typically
focus on keeping their original phone
numbers and then on reducing tariffs.
With broadband services, their primary
concern is the broadband brand followed
by cost considerations. Video conferencing,
video monitoring and mobile office
applications are also commonly required
by these enterprises.
Our strategy for full-service operation
puts the primary focus on government and
enterprise customers, while taking into
account the requirements for households
and individuals. The convergent services
have three aspects:
First, is to provide innovative services
that meet personalized customer
requirements, such as dual-number mobile
service, convergent VPN, flexible roaming
and one number link you (ONLY) service.
Second, services are bundled to meet
new needs. For example, combining the
corporate ring tones to the ONLY service
so that employees can work while roaming.
Third, high-end services are re-designed
for low-end customers.
Services are developed at two stages.
At the first stage, enterprise customers
using various access modes and terminals
are provided with basic voice services
and value-added services based on the
IMS platform. This realizes convergent
corporate access, enhances customer
loyalty and helps to avert a price war.
Enterprise customers are provided with
convergent services such as a corporate
communications assistant and video
telephony through the GPON. Besides
meeting the basic communications needs
of enterprise customers, the IMS also is
advantageous in terms of openness, fast
service rollout, and unified access.
The second stage is to provide
enterprises with video-based highbandwidth service and corporate
applications like an enterprise address
book to enhance ARPU. Services like
standard-definition/high-definition video
conferencing and mobile video monitoring
are the two basic services that we focus on.
The introduction of various preferential
full-service packages has definitely helped
us expand customer base quickly and
enterprises enhance communications.
Promoting network
construction and
upgrades
Full-service network construction
is a complex project that involves all
network aspects. IMS is the key to fullservice operation. We needed to construct
and upgrade relevant operation support
systems and service platforms, interconnect
the IMS platform and existing networks,
as well as plan and deploy the GPON.
We also optimized bearer network and
data networks inside the enterprises to
ensure network quality and QoS.
Unified NMS and service
provisioning
To simplify and ease network O&M,
China Mobile Zhejiang adopts a unified
core network management system (NMS),
M2000, to manage IMS and the legacy
mobile core network. The M2000 can also
be upgraded to realize unified core network
management and protect investment.
Huawei Communicate
Moreover, we deploy the service provider
gateway (SPG) as a unified gateway for
the IMS, which integrates the subscription
interfaces of each network element. The
SPG provides a single SOAP interface to
interconnect with the business and operation
support system (BOSS), giving the BOSS
integrated subscription commands.
Convergent platform at the core
After deploying the IMS at the core
layer, we enrich services through unified
access of fixed and mobile services, such
as GPON, PBX, HGW, SIP terminals,
mobile phones, wireless fixed phones and
data cards. These methods enable both
mobile and fixed-line customers to enjoy a
unified service experience.
In the future, the IMS-based core
network can be smoothly evolved into
FMC. Between the IMS core network
and the application server (AS), an SIPbased IMS service control (ISC) interface
is applied to separate services from call
control. In this case, we only need to
add ASs to deploy new services, without
changing the IMS core network and
the end result is enhanced full-service
operation capability.
Multi-service QoS at the bearer layer
The service quality and user experience
are closely related to the bearer network.
In addition to data services, CMnet,
the bearer network for China Mobile
Zhejiang, needs to bear the real-time voice
and video services for enterprise customers
during full-service operations. We decided
to optimize the CMnet to meet the QoS
requirements of enterprise customers,
especially real-time services.
We u s e t h e C M n e t t o b e a r t h e
signaling flows and media streams for high
speed Internet access, VoIP and video
conferencing services. However, the VoIP
and video conferencing services access to
the IMS core network through the session
border controller (SBC) and ensure the
QoS of real-time services.
Customers with GPON access will see a
rapid growth when IMS-based convergent
services mature. To meet the future growth
of service subscription and O&M needs,
we have reconfigured and optimized the
GPON networking, IP address and VLAN.
Flexible networking at the access
layer
To m e e t f u t u r e F M C e v o l u t i o n
requirements for enterprise customers
on a GPON, the legacy networking is
kept intact at the customer side. All voice
customers are registered on the IMS,
without being transferred by softswitches
or IP front end processors.
We have plans to set up 11 access
gateways to bridge the legacy PBX
customers and interconnect PBX and IMS.
Enterprise customers can also flexibly access
the IMS network through the new IP PBX.
Because enterprise Intranets var y
and have different QoS guarantees, we
tailored voice solutions to fit individual
networking needs. Based on the scale and
network management capability of each
enterprise, we divide our customer groups
into Intranet and non-Intranet clients.
Government office and large enterprises
usually have Intranets and sophisticated IT
systems. QoS and voice services bandwidth
can be ensured through internal networks.
Enterprise data services can interconnect
with SIP terminals, IAD/AG, and video
conferencing terminals. Small and medium
enterprises without an Intranet can hardly
provide effective QoS guarantees, but
voice services can be enhanced through the
imbedded AG module in an ONU.
By fully considering specific enterprise
re q u i re m e n t s , we c a n t h e n p rov i d e
customers with quality-enhanced services,
including high speed Internet, video
conferencing and VoIP.
Customer-centric
network O&M
System changes for full-service
operation pose higher requirements for
network maintenance, including flexible
s e r v i c e p rov i s i o n i n g , q u i c k m a rk e t
response, level-based service assurance and
network security. Convergence of fixed
and mobile networks brings richer services,
yet more complex service logic.
China Mobile Zhejiang is shifting its
focus from individuals to customers from
government, enterprises, and families. A
single product and service can no longer
meet customer requirements as integrated
solutions and one-stop services are now
expected. To come out on top in a fullservice operation environment, we optimize
the O&M structure to meet expanding
network, service and customer needs.
We recognize that our strength lies
in centralized O&M capability, the
professional O&M team and strong
outsourcing management capability, while
we are weaker in the area of integrated
access O&M both in terms of capability
and number of engineers.
Dr a w i n g f ro m t h e e x p e r i e n c e o f
overseas partners, we have developed some
new O&M models.
First, optimize the network department
structure and set up a customer-oriented
department to open communications with
customers. Second, streamline the complex
management process and define specific
workflows for fixed voice and Internet service
respectively to enable fast customer response.
Third, maintain the existing managed service
and evolve it in line with the global trends.
The O&M optimization of our full
service network includes the organizational
structures, O&M flows and modes.
O&M flows are further divided into
specific flows covering service processing,
engineering, handling complaints and
daily maintenance. Take service processing
as an example. We add project design and
auditing, plus project engineering to more
efficiently process customer applications.
Compared with the original methods
of handling customer complains, our new
method adds fault analysis and maintenance
functions. This can help detect faults in
customer networks, facilitate cooperation
between departments and respond quickly to
emergencies, big and small.
Fine management helps us not only
in terms of customers, products and
networks, but also to promote O&M
efforts, optimize network resources,
streamline maintenance, and enhance
service support. With an evolving
O&M concept, China Mobile Zhejiang
has shifted from technology-centric
to product/service-centric and most
importantly, to customer-centric.
Editor: Li Xuefeng [email protected]
DEC 2009 . ISSUE 53
16
Main Topic
Main Topic
National broadband initiatives are blooming across the globe and transforming the
telecom landscape. In this context, a successful national broadband strategy requires a
mature ecosystem for future development and a strong input from government.
National broadband
is on the way
By Chen Feng & Xu Hong
South Korea takes
the lead
I
magine a pleasant stress-free Sunday.
Jun-Ki is relaxing at home in front of
IPTV, his thoughts a million miles
away from the office. An onscreen
video message pops up on his laptop–
an invitation from his friend to join the
online role-playing game (RPG) they
both like playing. He accepts and spends
a couple of hours gaming before going to
meet his girlfriend, who he promised to
take to see the new romantic comedy. He
uses his RFID card to pay for his subway
fare and, once seated, updates his Internet
17 DEC 2009 . ISSUE 53
blog and watches the news on his phone
to use up the dead time on the way to
downtown Seoul.
Broadband continues to add value
to the lives of millions in South Korea.
Strategy Analytics revealed that South
Korea’s broadband penetration rate led the
world in 2008. The widespread application
of FTTH and FTTB provides South
Koreans with speeds of between 50 and
100Mbps and, notably, FTTH serves over
30% of all domestic broadband users,
compared with just 2.3% in the United
States by early 2009. South Korea is home
to a remarkable 30% of the world’s WiFi hot spots, and 3G phones, PDAs, and
wireless laptops are mainstream tools
amongst its population of 48 million. The
broad acceptance of broadband is paying
economic dividends too–in 2008 ICT
accounted for 17% of Korea’s GDP and
40% of its exports.
This success is attributable to
a consistent development and
implementation strategy. Continual
investment in South Korea’s national
broadband initiative has been invaluable
in deepening broadband penetration and,
with close links to economic and industrial
policies, is continuing to help maximize
South Korea’s competitiveness.
In 1987, the South Korean government
emerged as the first in the world to
establish a national policy to promote
ICT in the public and private sectors,
and created the National Information
Huawei Communicate
Society Agency (NIA) to manage highspeed network construction. In 1994,
the NIA went on to establish the Korea
Information Infrastructure (KII) initiative,
which covered a series of 5-year ICT plans,
examples include e-Korea Vision 2006,
Broadband Convergence Network (BcN),
and the u-Korea Master Plan.
In Fe b r u a r y 2 0 0 9 , t h e Ko re a n
Broadband Plan was launched to improve
the country’s ICT infrastructure by 2012.
Aiming to provide minimum wired access
at 1Gbps and wireless access at 10Mbps,
the plan is expected to create 120,000
jobs.
Trends and features
Na t i o n a l b r o a d b a n d i n i t i a t i v e s
have been taking shape around the
world. Australia announced its national
broadband network (NBN) scheme, which
aims to provide 90% of Australian homes
and businesses with download speeds
reaching 100Mbps. 7.2 billion USD
has been earmarked for the broadband
component of the US stimulus package,
Singapore has launched its 10-year
Intelligent Nation 2015 (iN2015) plan,
Malaysia is implementing its high-speed
broadband program, and Japan’s NextGeneration Broadband Strategy 2010 is
underway. Frost & Sullivan forecasts that
the broadband subscriber base in the Asia
Pacific region will grow at a CAGR of
14.1% between 2009 and 2014, at which
point it will have reached 342.9 million
subscribers.
While the schedules and technical
details of these national broadband
initiatives vary, they have four features in
common: ultra-high capacity, openness,
convergence, and eco-friendly.
Ultra-broadband
A national broadband initiative utilizes
several transformation catalysts to support
more powerful applications. The major
targets are to accelerate data transfers,
achieve real-time collaboration, and
simultaneously use multiple applications.
A national broadband initiative has to
satisfy bandwidth-hungry applications,
DEC 2009 . ISSUE 53
18
Main Topic
National broadband is on the way
such as video conferences, home
surveillance, streaming video, and HDTV.
Based on similar projects around the
world, Huawei’s research indicates that
30 to 100Mbps is the inevitable shortterm minimum range. Singapore’s iN2015
project, for example, requires 100Mbps
downlink and 50Mbps uplink speeds in
2010.
The main technologies underpinning
iN2015 and the growth of Singapore’s
future bandwidth demands are FTTH and
GPON. iN2015 aims to increase uplink
speeds as applications such as video sharing
become more popular and continue
to devour bandwidth. By June 2009,
Nucleus Connect, a subsidiary owned by
StarHub under the iN2015 banner, had
begun deploying GPON equipment for
residential access and a GPON/pointto-point Ethernet mix for commercial
buildings. Two speed options are initially
planned: 100Mbps downlink/50Mbps
uplink or 1Gbps downlink/500Mbps
uplink for residential customers;
symmetrical 1Gbps or symmetrical
100Mbps access lines for enterprise users.
In addition to FTTH, iN2015
incorporates a national Wi-Fi network that
has been up and running for over a year
and that, by June 2009, boasted more than
7,550 hotspots for providing free, islandwide coverage in public areas.
Openness
A national broadband initiative
needs an open network architecture and
business model. For example, Australia
plans to spend 43 billion USD to create
a fiber optic network over the next 7 to
8 years to cover its regional and capital
cities. This NBN will operate on a
“structural separation” model in which a
single wholesaler will provide broadband
connections to retail operators.
The structural separation model allows
broadband retailers to supply their services
to more regions at faster speeds based on
an open NBN that facilitates fair access.
Competition is based on the wholesale
price, and this will encourage service
providers to raise their game in order to
attract customers. Tasmania rolled out its
NBN in July 2009, the first stage of which
19 DEC 2009 . ISSUE 53
will provide an open access broadband
network for wholesale in 2Q 2010, which
will serve local customers and act as a
reference point for the larger network in
Australia.
Convergence
National broadband initiatives must
host complex networking scenarios
that facilitate convergence, layered QoS
capabilities, and varied service level
agreements (SLAs). Examples include the
coexistence of IP and legacy TDM/ATM
services; a rich mix of voice, data and
video content; and diverse access methods
for both wireline and wireless technologies
over a single network.
South Korea’s BcN, for example, aims
to develop a next generation network in
three stages. The first involved formulating
network plans and standards and
constructing a pilot network during 2004
and 2005. The BcN was then expanded
during the second stage in 2006 and 2007
to provide commercial services and access
5 million houses with FTTH access. The
final stage, which began in 2008 and will
be completed in 2010, covers nationwide
deployment and the FTTH connection of
10 million homes.
The government is giving legal and
administrative help with issues such as
standards and funding research. The
telecom industry is constructing the BcN
with its own investment contribution and
through developing and providing services.
Subscribers will be able to access the
completed network through various home
Intranets and terminals for guaranteed
broadband services anytime and anywhere.
The network will also provide open APIs
to third-party developers thanks to a range
of QoS, security, and IPv6 policies.
Eco-friendly
As massive-scale investment and
infrastructure projects, national broadband
initiatives inevitably need a robust
e n v i ro n m e n t a l p l a n , i n c l u d i n g t h e
application of clean energy sources and
energy-efficient technologies, and the reuse
of existing network equipment and site
facilities.
Building the eco-system
Public and private sector collaboration
is essential for national broadband success,
given the variety of stakeholders that span
government, operators, vendors, and SPs.
Network planning, implementation, and
operation require a complete and mature
eco-system.
The vital role of government
Governments enable national broadband
development by formulating strategies
and policies, issuing mandates, and giving
administrative guidance to broadband
providers. They also need to encourage
broadband deployment in rural areas
and offer low-cost loans, grants, and tax
incentives.
Beginning in the mid-80s, the South
Korean government has adopted an
exemplary long-sighted approach. This
has culminated in a national high-speed
backbone network, and a wealth of R&D,
IT projects, and ICT applications. It
also pushed for extremely low prices for
the public sector and free Internet access
for schools; doing so has brought the
information age quickly into the public
realm and enhanced IT education, which
further stimulates demand and encourages
SPs to drop their prices.
Operators as key partners
Practice has shown that operators are a
major force in implementing the national
broadband initiative, helping governments
draft initiative blueprints, investing in
line with government policy, maintaining
networks, and delivering services.
Operators have been given full play of
their roles in iN2015, the backbone of
which is the NGN broadband network.
T h i s N G N B N i s b ro k e n i n t o t h re e
conceptual layers: Layer 1 is made up of
network company (NetCo) responsible
for the passive NGNBN infrastructure,
for example, ducts and wirelines. Layer 2
consists of operating company (OpCo) who
focuses on NGNBN active infrastructure
such as switches and transmission
equipment. Layer 3 comprises retail service
provider (RSP) responsible for designing,
Huawei Communicate
building and operating network entities,
including servers and CPEs.
The iN2015 has one NetCo, who
operates in open access and wholesales
wirelines to several OpCos. These OpCos
then wholesale services and bandwidth
to RSPs, who compete with each other
through their service portfolios.
The OpenNet consortium, in which
SingTel has a 30% stake, won the NetCo
bid. OpenNet has allocated 2 billion
USD to the NGNBN project including
700 million USD for infrastructure
construction, with the government putting
up an additional 516 million USD.
Nucleus Connect won the OpCo bid,
and is set to enjoy a boost from StarHub’s
planned investment of 66 million USD,
which will help purchase a quartercentury license at 664 million USD.
The government is supporting Nucleus
Connect and the project with a further
166 million USD.
Third parties support
Third par ties generally comprise
equipment vendors, CPs, and SPs. All of
whom are invaluable given that network
equipment, Internet applications, and
telecom services form elements of national
broadband projects.
Vendors are key providers of broadband
equipment, including Huawei, who is
currently partnering with Etisalat to
deploy GPON equipment and an optical
distribution network (ODN) on Al Reem
Island, which lies 600m off the Abu
Dhabi coast. In September 2009, Nucleus
Connect selected Huawei to deliver the
end-to-end solution that will power
Singapore’s NGNBN project. Based on
its specialist teams and rich experience,
Huawei is ready to provide strong and
tailored service support to help operators
across the globe realize their national
broadband visions.
Editor: Michael [email protected]
Public and private sector collaboration is essential for national broadband success, given the
variety of stakeholders that span government, operators, vendors, and SPs. Network planning,
implementation, and operation require a complete and mature eco-system.
DEC 2009 . ISSUE 53
20
Main Topic
Brilliant life powered by Smart City
Brilliant life powered by Smart City
A Smart City efficiently handles the information boom and creates value across many sectors. Based on a combination of
virtual and physical infrastructure and intelligent functions powered by network and IT technologies, Smart City offers a
perfect lifestyle choice for individual users.
By Chen Feng & Huang Ying
Smart City worldwide
Singapore: iN2015
R
Intelligent Nation in Singapore was
one of the predecessors to the Smart
City. On June 19, 2006, the Singaporean
government launched the Intelligent
Nation 2015 (iN2015) program. The
aim is to improve their competitiveness
and ability to innovate within the next
10 years and transform the country into
ecent statistics show that over
1000 Smart City projects have
been started or are underway
in Asia, Europe, the Americas
and Africa. It is expected that there
will be 1500 by 2010, with an annual
compounded growth rate of 20%.
21 DEC 2009 . ISSUE 53
“an intelligent nation and a global city
powered by infocomm”.
In 2008, Singapore’s total communications
output soared 12.4% to over 41 billion
USD, with the export value over 25 billion
USD, accounting for 61% of the total
output. 90% of the nation’s enterprises had
their own websites, with a 100% Internet
usage rate. Household broadband coverage
increased from 55% in the previous two
Huawei Communicate
years to 82.5%; and 94% of households
with children had at least one computer.
Germany: T-City
In Friedrichshafen in Southern Germany,
with an investment of 115 million Euros,
Deutsche Telekom launched the T-City
program to build a prototype project
that could guide the operator’s future city
construction. T-City delivers a range of costeffective one-stop services for governmental
affairs, entertainment, education, plus
health and tourism inquiries.
UAE: DIC
DIC TECOM (a subsidiary of
TECOM) is in charge of the Dubai Internet
City (DIC) network construction and
O&M. Due to an influx of international
capital and the integration of domestic
networks, DIC has evolved into DU, an
integrated telecom operator providing
communications services for individuals
and households, as well as diversified ICT
services for high-end office complexes like
Dubai Internet City, Dubai Media City,
and Dubai Knowledge Village. Following
the wake of success, TECOM and Sama
Dubai have set up a joint venture called
Smart City to promote the model in Malta
and Kochi, Japan.
Cities with best practices
The World Expo 2010 to be held in
Shanghai, China will provide a special
showcase of “Best Practices Regions” where
cities can show off their most innovative
and valuable solutions related to urban
construction and management.
So far, 44 cities have signed up to
participate, including Seoul, South Korea
which will exhibit its open government
and provide a platform for online policy
discussions and information sharing
through an e-Government program.
Another exhibitor, the city of Chicago, USA
focuses on the use of green technologies and
protecting natural resources as part of its
commitment to building a sustainable and
eco-friendly city. The good news is that all
of these practices provide benchmarks for a
Smart City.
Whether driven by governments,
telecom operators or SPs, these Smart City
practices share the same ultimate objective
of efficiently serving the public with
information.
What characterizes a
Smart City?
The Smart City concept includes Digital
City and Wireless City. In a nutshell,
a Smart City describes the integrated
management of information that creates
value by applying advanced technologies
to search, access, transfer, and process
information. A Smart City encompasses
e - Ho m e , e - O f f i c e , e - G ov e r n m e n t ,
e-Health, e-Education and e-Traffic.
A Smart City is purported to be the
fourth in size and importance when
it comes to infrastructure after water,
electricity and natural gas. The availability
of information in a Smart City represents
an important standard that measures a city
or even a country’s ICT level, international
competitiveness and influence. In 2009,
the ITU released the ICT Development
Index (IDI), which is designed to provide
a comprehensive measurement for the
ICT advancement in a global, national or
regional context.
Geographically, a Smart City can be
either an estate built by a developer, an
urban economic development zone, a city,
a district or even a country.
Oriented to different investors and
requirements, a Smart City focuses on
different key services, including urban
management services, such as e-Police and
e-Urban Management, and digital home
services relating to home security. A Smart
City can provide the following services:
e-Government can greatly enhance
governmental transparency and increase
the efficiency of handling governmental
affairs. Citizens can quickly inquire about
or apply for services at home. They can
also view news, weather and traffic reports,
and tourist information through various
terminals, even discuss government
policies through online forums.
DEC 2009 . ISSUE 53
22
Main Topic
Brilliant life powered by Smart City
e-Traffic mitigates heavy traffic by
electronically monitoring and diverting
traffic, while reducing emissions and energy
consumption through the remote control
of stop lights and other energy-guzzling
devices needed to keep a city running.
Video surveillance monitors the city
in real time to help prevent crime, conduct
research and allocate resources appropriately.
e-Health and e-Education allow citizens
access to high-quality medical care and
education at home. Through high-definition
videos or networks, citizens can consult
experts worldwide and search relevant
information anytime and anywhere.
e-Home helps to ensure the safety of
elders and children that are home alone
through remote monitoring and can even
control indoor electrical appliances.
Technical DNA
Although the Smart City may have
different objectives, each of them has the
same technical makeup in the construction
23 DEC 2009 . ISSUE 53
of the ICT network (chiefly the inclusion
of FTTx) which features integration, ultrabroadband, operation, and environmental
friendliness.
FTTx: GPON or P2P Ethernet?
For the last mile of the Smart City, most
developers choose GPON, while others are
exploring the feasibility of P2P. Accessing
the key requirements will help to obtain the
best technical solution for a Smart City.
Fi r s t , t h e a c c e s s m e a n s s h o u l d
accommodate legacy terminals and highsecurity services from organizations like
banks. A Smart City needs to support
services like E1, E3, DS3, STM-1, PRI,
ATM, FR and X.25. Providing backhaul
for mobile base stations, a Smart City
should also provide access to GSM-based
TDM and UMTS-based ATM services.
GPON outperforms P2P Ethernet in
terms of multi-service bearing, because
it supports TDM/ATM/IP services and
integrates traditional interfaces with
Ethernet interfaces. For this reason, Dubai
UAE needed to deploy an independent
GPON network that supports traditional
services after launching an Ethernet at the
beginning of the DWC Smart City project.
Moreover, a Smart City access network
needs to carry all the services of different
terminals, including VoIP and IPTV
services that require high reliability and
QoS. GPON has advantages over P2P
Ethernet as it supports TDM/ATM/IP
services and has different bearer models
for varied service types. It also enables
dynamic bandwidth allocation for flexible
service requirements.
Amid global warming, energy crisis
and environmental degradation, it is
common sense to protect the environment
with green practices. As a model for
urban transformation, a Smart City is
undoubtedly on the cutting edge. Unlike
P2P Ethernet, GPON relies on a passive
optical splitter to allow subscribers to use
only one GPON port, thus decreasing
CAPEX, OPEX, and energy consumption.
In summary, GPON is superior to P2P
Ethernet in many ways and especially
Huawei Communicate
suitable for households and small and
medium enterprises.
Business models
UC: IMS-based IP Centrex
or PBX?
A Smart City project involves end users,
developers, operators, and regulators and
the business model reflects the interest
of all participants. The ultimate goal of
operators and developers is profit, while
regulators want to prevent redundant
construction and balance consumer
interests with profits.
The common practice is that a regulator
will cap operator prices or an operator
shares the network with others. The price
limit has proven to be ineffective, but
network sharing has gained popularity in
Europe. The local loop unbundling for the
last mile and the bit streams that share more
networks have become a dominant practice
for CLECs to develop broadband services.
Depending on the openness of network
construction and service deployment, a Smart
City may have four possible business models.
Private: A developer independently
builds a network to deliver services and
undertake network O&M.
Dubai World Central (DWC) in the
UAE, a 140 square kilometer development
zone centered around the world’s largest
airport has adopted this model. DWC
established a subsidiary called Smartworld
to undertake network construction, O&M
and provide certain services unrestricted
by local telecom regulations, while licensed
services were outsourced to local operators.
Contrary to free market efforts as well
as telecom licensing policies, this model
is difficult to implement as it may incur
many regulatory issues.
Exclusive: A developer chooses an
operator to construct a network and provide
services. Only the operator has the right
to operate within the designated area.
Because of the open network trend, this may
encounter the same regulatory issues as the
private model.
Managed: A developer appoints an
operator to construct the only network in a
specified area and the operator has exclusive
rights for network O&M. All qualified
operators can deliver services through this
network. This model is easily implemented
as it minimizes repeat construction,
provides more options for subscribers and
eliminates the need to obtain a new license.
Enterprise-oriented unified communications
(UC) currently has two solutions: One
is IP PBX and the other is IMS-based
IP Centrex. The fact is that these two
solutions are suited for different scenarios.
An IP PBX is suitable for a single
enterprise, while the Centrex solution is more
suited for operators to deliver hosted Centrex
services for several companies or large multinational enterprises. However, the IP PBX
requires professional maintenance personnel
and that means increased maintenance costs.
The IMS-based IP Centrex, deployed
by Smart City developers to deliver
hosted PBX services, eliminates the need
for separate maintenance and has the
following advantages over the IP PBX:
Service and access convergence: IMS
separates control from service, and provides
open and standardized TISPAN and
3GPP interfaces, facilitating new service
development such as IMS-based IPTV
and integrated telecom, Internet, media
and entertainment (TIME) services, while
shortening time to market by cooperating
with third-parties. IMS is less related to an
access network than regarded as a common
core network by various standardization
organizations including WiMAX. In the
future, IMS can function as a core network
if a Smart City developer can obtain a
telecom license as did the operator DU in
Dubai.
Investment protection: A PBX can
generally support less than 100,000
subscribers and its models vary according
to subscriber base. If an enterprise’s
subscriber base grows, the PBX has to be
replaced, wasting money and interrupting
services during new installation. IMS
supports smooth expansion and can serve
subscribers ranging from thousands to
millions, thus protecting investment and
enabling easy deployment.
To meet hosting requirements, an IMSbased IP Centrex solution provides an ideal
option for a Smart City as it outperforms
a PBX in terms of both operation and
integration.
Nevertheless, finding the right party to
construct and operate this kind of network
remains a pressing problem.
Open: Similar to operations within a
public area, all qualified operators and service
providers can construct a network and
provide services in the area and subscribers
can choose any network and service.
Given uncertainties over regulatory
policies, it remains unknown which
business model will prevail. Due to the
financial downturn, developers tend to
be cooperating with operators in network
constr uction and O&M, instead of
building network by themselves.
Great potential
Smart City construction is complex
and risky. To ensure smooth delivery,
the developer should select a reliable and
responsive partner capable of E2E delivery.
The partner should be able to provide
technical advice in the planning phase,
supply reliable and flexible solutions,
integrated ODN and data center delivery
in the construction phase. They also need
to bring professional services, expand or
upgrade ICT infrastructure and services for
varying customer needs and the growing
subscriber base during the operation phase.
This is what Huawei brings to the table.
Integrated with broadband, communication,
data center and professional services,
Huawei’s E2E Smart City solutions are
tailored for households, enterprises and
public spaces.
Developers can deploy more upperlevel applications, such as public services,
security surveillance, and intelligent
buildings. So far, Huawei has successfully
implemented the Smart City solution in
the UAE DWC project and the Smart City
project for Al Reem island in Abu Dhabi.
To keep pace with the changing global
economic landscape, enterprises are faced
with opportunities and challenges for
both industry integration and business
transformation. Information technologies
can help enterprises meet new challenges
and create greater value with the Smart City
concept, which is poised to be the most
popular solution around the world.
Editor: Pan Tao [email protected]
DEC 2009 . ISSUE 53
24
Main Topic
MSOs expand business horizons
MSOs expand business horizons
Fundamental changes are impacting information service providers and forcing them to leverage their unique competitive
advantages in the search for new growth points. Multi system operators (MSOs) are also affected by current trends, and
are seeking ways to sustain a strong market position.
By Chai Jiayong & Liu Yingke
MSOs now and in the future
L
ooser government regulations
have encouraged the TV and
communications industries
to open further and enter
each other’s once exclusive territories.
Conventional cable TV operators are
evolving into MSOs with expanded service
portfolios that encompass TV, broadband,
and fixed phone services.
The MSOs with the highest revenues
and most subscribers can be found in North
America, Europe and the Asia Pacific. The
well-documented economic downturn
has caused people around the world to
tighten their belts, which has hit businesses
hard and seen performance spiral across
sectors. The majority of MSOs, however,
have ploughed through these tough times
with tremendous growth. Fig. 1 illustrates
the stable financial conditions and higher
ARPUs and profits enjoyed by MSOs
compared with telcos.
The success of MSOs is broadly
attributable to their range of fresh and
superior service offerings coupled with the
ability to enhance quality of experience (QoE)
and functionality for subscribers. When
analogue TV gave way to digital TV, MSOs
were able to offer more channels and features
such as VOD, HDTV, and time-shift TV.
With the advent of TV services such
as interactive voting, online games, and
reservations and bookings for various
activities, aggressive promotional activities
have firmly brought value-added TV to the
public realm. Such services have opened up
new profit streams for MSOs, who are also
capitalizing on leasing wired broadband
25 DEC 2009 . ISSUE 53
and providing bundled packages that
include voice services. However, entry into
the mobile world for most MSOs has been
at best shaky, and requires more robust and
long-term network development policies
to maximize returns.
The mobile march
As MSOs penetrate the telecom
industry, telcos are gradually shifting to
full service operations with IPTV services
based on ADSL/LAN/FTTx competing for
traditional TV subscribers. Verizon’s FiOS
and AT&T’s U-verse are both challenging
MSOs with a range of new options and
experiences for subscribers, which reflects
the rapidly efficient development paths of
both operators.
Mobile services are continuing to
supersede fixed services. By the end of
2008, mobile subscribers had reached
3.5 billion, which is expected to rise
to 5 billion over the next few years. In
particular, the growth of mobile broadband
services has not only been explosive, but
the market gap is immense. Current trends
indicate that mobile broadband subscribers
will total 1.5 billion by 2014.
The convergence of industries brings
both opportunities and threats. MSOs are
no longer satisfying the market with triple
services, and are having to compensate for a
lack of mobility with a bundle of TV, fixed,
mobile and broadband services. This more
holistic service range aims to stop fixed
subscriber churn, exploit the advantages
of video services, increase competitiveness
through differentiation, and stimulate
further business development.
Huawei Communicate
The lack of wireless spectrum was
previously the largest obstacle hindering
entry to the mobile market. However, the
ITU recently assigned new frequency bands
such as AWS, 700MHz, 2.5GHz, and
3.5GHz, for which new licenses are under
auction in several countries. North American
MSOs, including Comcast, Cox and TWC,
have already cleared a path to the mobile
market by obtaining a total of 137 AWS
licenses. Comcast is now selling Clearwire’s
WiMAX services, Cox has selected Huawei
to build its CDMA2000 network, and
Chile’s VTR is expected to get the nation’s
fourth mobile license by the end of 2009.
MSOs’ traditional subscriber groups
are families, though their widening service
portfolios are mirrored by business strategies
that have expanded to encompass additional
target subscriber groups; for example,
small and medium enterprises (SMEs) that
require one-stop office communications
solutions. MSOs are now in a position to
offer competitive prices and high quality
services through broadband/voice packages
plus other services such as free TV, enterprise
clusters, IM, and integrated video.
Long-term vision
Service convergence necessitates network
convergence. Future network evolution
to IMS and All-IP will simplify network
architecture and service management,
which will in turn enhance QoE through
greater overall efficiency and quality.
Evolving to IMS
The successful incorporation of
PacketCable 2.0 into the international
IMS standard has intertwined the future
of the two. Quadruple service convergence
and IPTV will be IMS-based, and
broadband and mobile networks will fall
under IMS control.
IMS-based core networks and
independent sub-networks carr ying
quadruple services will offer identical
interfaces to the BOSS and unify account,
service and billing management. Essential
measures for MSOs not wishing to
enter the mobile market are performing
upgrades to existing networks, converging
core networks, offering richer services, and
USD
150
40%
EBITDA
ARPU
30%
100
20%
50
10%
0
0%
VDF UK
Virgin Media
Verizon
Rogers
AT&T
Comcast
Fig. 1 Performance of MSOs and telcos
providing flexible and convenient billing
mechanisms.
Enhancing the bearer network
The digital flood caused by HD, 3D and
user-generated content (UGC) is increasing
traffic rates across backbone networks by
between 50% to 80% each year, while access
networks are experiencing double- or threefigure annual traffic growth. Thus, bearer
networks are approaching the E2E TB era.
To remove transmission bottlenecks caused
by HDTV and P2P applications, backbone
transmission networks may evolve into NGWDM networks and OTNs to enlarge
equipment capacity and augment business
capabilities. Overhauling the DWDM can
double transmission capacity without new
optical cables; router clustering, 40G/100G
interfaces or built-in WDM interfaces can
dramatically improve the processing capability
of digital communications equipment;
and SQM enhance differentiated
network management.
Ultra-broadband access network
As the most promising ultra-wideband
access technology, xPON is destined to
lead future fixed access networks and will
ultimately accommodate the data over cable
service interface specifications (DOCSIS)
evolution. xPON is more efficiently, raises
bandwidth, and increases access distances
while maintaining carrier-class quality. xPON
also supports E2E service management, and
displays notable advantages when carrying
quadruple play services.
With coaxial cables connecting subscribers,
MSOs can enable packet data transmission in
both uplink and downlink following network
renovations, supporting the development
of interactive TV and providing broadband
Internet access. In fact, wired broadband
forms one of the highest potential profit
streams for MSOs. As optical nodes come
closer to users, FTTH is no longer a dream; it
is easy to deploy FTTH in new buildings to
give light speed access to multiple services.
In the wireless field, network evolution
will allow old and new technologies to
coexist for at least the next ten years,
including GSM, EDGE, UMTS,
HSPA and LTE. Rather than overlaid or
independent networks, MSOs instead
require a single converged network that
provides various voice, narrowband data,
and mobile broadband services capable of
later adaptation to LTE networks.
All-in-one terminals
Future bottlenecks may occur with
terminals as networks design eliminates
legacy problems. However, in addition to
Femtocells, all-in-one, intelligent terminals
are set to supersede set-top boxes (STBs),
embedded Multimedia Terminal Adapters
(eMATs) and cable modems in the home
to carry MSOs’ multi-play services.
With a comprehensive understanding of
the communications world, Huawei provides
one-stop consultation services for MSOs
across a wide range of disciplines, including
market and economic analyses, strategic
planning, service and promotion planning,
and network planning and design. Huawei
is positioned to help MSOs consolidate their
advantages, explore new opportunities, and
confidently explore a bright future.
Editor: Li Xuefeng [email protected]
DEC 2009 . ISSUE 53
26
Business Mode
Unlocking the secrets of SoftBank’s 3G success
Unlocking the secrets
of SoftBank’s 3G success
SoftBank Mobile conducts the fastest 2G to 3G evolution in Japan. After the acquisition on Vodafone K.K. in March 2006, the
operator has sustained leading subscriber growth rates for an impressive 26 consecutive months despite a saturated market
and intense competition. Its 3G customers now account for 93% of its total subscriber base. As the unequivocal leader in
non-voice ARPU growth, we can surely learn much about 3G operations from SoftBank Mobile’s unparalleled success.
By Zhou Jing
V
odafone sold its Japanese
subsidiary, Vodafone K.K.,
to SoftBank on March 17,
2006. As a holding company
of Yahoo! Japan at the time of acquisition,
SoftBank already owned Japan Telecom,
Japan’s third largest fix-line telephone
operator, and SoftBank BB, Japan’s largest
broadband service provider. Foreseeing
that mobile Internet is destined to outpace
fixed Internet, SoftBank president,
27 DEC 2009 . ISSUE 53
Masayoshi Son is dedicated to expanding
the company’s existing service portfolio to
integrate Internet portal, high-speed data
communication, and fixed and mobile
services.
While Vodafone K.K.’s 15.13 million
subscribers, 16.8% market share and
a booming 3G market strengthened
SoftBank’s entry into the mobile Internet
sector, the competitive hurdles thrown
down by NTT DOCOMO and KDDI
still seemed insurmountable. The two
Japanese giants enjoyed five times more
subscribers than SoftBank at that time. It
was widely believed that SoftBank would
soon fall flat due to the lack of operational
experience in mobile telecommunications.
Surprisingly, SoftBank Mobile secured
the largest share of market net adds in
April 2007, just a year after its acquisition.
Thanks to a collaborative business model
and an innovative marketing strategy,
Huawei Communicate
SoftBank Mobile weathered the storm and
continued to grow in strength.
Group synergy pays
dividends
SoftBank Mobile synergized SoftBank
Group’s resources to strengthen its
brand, service channels, content, cost
competitiveness, and attract more
customers. By fully utilizing the group’s
legacy infrastructure, portals, channels,
and content, SoftBank Mobile developed
a series of differentiated products and
services to sharpen its competitive edge in
terms of price and marketing.
In partnership with SoftBank BB and
SoftBank Telecom, SoftBank Mobile
p rov i d e s i n n ova t i ve F M C s e r v i c e s ,
including integrated mail services for
enterprise users. Under the brand S!mail,
the operator has increased its mobile
subscriber base by attracting existing fixed
and broadband subscribers. The seamless
integration of Yahoo! Keitai Portal into its
mobile service portfolio raised SoftBank’s
brand equity, won more subscribers, and
increased service take up. Cross-marketing
strategies that utilize its existing channels
and subscriber resources have continued
to streamline the company’s resource
utilization and maximize returns.
All service branches of SoftBank Group
have benefited from service package sales.
A year after the acquisition of Vodafone
K.K., the SoftBank Group had increased
its profits by 19.6%, while SoftBank
Mobile enjoyed an impressive 12.1%
rise. More remarkably, SoftBank Telecom
recovered from a shaky performance. By
building a strong Internet service platform
that offered rich content, such as music,
sport, news, e-commerce, SoftBank
constructed a unique model that married
rich content, low costs, and a reliable
transaction platform.
This aggressive marketing model and
the synergy between SoftBank Group’s
various subsidiaries catalyzed greater profits
and a significant reduction in marketing
costs.
SoftBank’s 3G philosophy
SoftBank Mobile believes that mobile
phones are the key profit generator in
terms of Internet access, especially given
their prominence in Japanese society.
Increasing computing speed and resolution
are steering the role of mobile phones
towards an Internet access tool, which
in turn has driven SoftBank Mobile to
revolutionize the market landscape.
I n 2 0 0 6 , Ja p a n’s A R P U w a s t h e
highest in the world, with voice services
contributing 80% of operators’ revenues.
High charges for voice services, however,
detrimentally impacted service use and
customer loyalty. According to Masayoshi
Son, revenues from voice services are
expected to account for only 3% of
SoftBank’s total sales revenues in the next
decade. Though in 2006 data services
occupied only 20% of its sales turnover,
SoftBank began to reorient its focus
towards data and shrink away from voice
service as a means of achieving sustainable,
long-term profits and a stronger market
presence.
SoftBank Mobile then consolidated its
data tariff plan by attracting subscribers
with a very aggressive voice pricing strategy
and inexpensive 3G mobile phones. It
was anticipated that the resulting losses
from voice would be offset by the longterm sales of value-added data services. To
raise the quality of mobile phone services,
the operator expanded and upgraded its
3G network. In just a year, it doubled its
number of BTSs, which now outnumber
NTT DOCOMO’s and have dramatically
improved network quality. Its corporate
and technical strategies have resulted in
ARPU variance below 1%, the success of
which is remarkable given the prevailing
trend of spiraling ARPU.
Distinctive mobile phone
customization and sales
models
As Japanese operators dictate the
direction of the industry chain, phone
vendors customize handsets according
to demand. Before being acquired by
SoftBank, Vodafone K.K. lost a large
number of its customers to KDDI and
NTT DOCOMO, who were offering
more stylish phones with greater
functionality.
Following the takeover, SoftBank
targeted the handset market and began
retailing a wide range of slim and ultratrendy phones in various colors and
styles. Outshining those available from
KDDI and NTT DOCOMO, Masayoshi
Son recalls the company’s simple aim,
“We wished to provide customers with
the slimmest and most stylish phones.”
Innovative designs resulted in a stunning
debut in handset retail; for example, the
705SH became the slimmest phone on
the market, and the 707SC sparkled with
Swarovski crystals.
To integrate mobile telecommunications
and the Internet, SoftBank Mobile
concentrated on functionality. In addition
to a large, high-res screen; increased
memor y; HSPA capability; and easy
Internet access, SoftBank’s unique handset
design catered to subscribers’ fashion,
entertainment, and business needs.
Prioritizing ease of use, subscribers can
access content such as stock markets, news,
music or even their home PC. A simple
press of the “Yahoo!” key, for example,
directly accesses the Yahoo! Mobile Portal.
In addition to the operation system,
Windows Mobile Professional Edition
6.0, that offers enhanced stability and
functionality, the smart phone X01T
integrates other security features, such as
fingerprint recognition on its back cover.
With these enhancements and
innovations, SoftBank’s mobile phones
have been a hit in the market to the extent
that complaints usually concern waiting
times. On June 4, 2008, SoftBank Mobile
introduced the iPhone, hoping to attract
more music and technology enthusiasts.
However, the more stylish and smart
mobile phones come with a higher price
tag, forcing operators to offer inducements
at the sacrifice of profits to attract
customers. SoftBank Mobile launched a
24-month installment plan in September
2006 to ease the financial burden of buying
a high-end phone, which it supplemented
by giving the first 2 months free of base
charge, and selective discounts of monthly
base charges and data services throughout
the contract. This move was also long-term
DEC 2009 . ISSUE 53
28
Business Mode
Unlocking the secrets of SoftBank’s 3G success
thinking on SoftBank’s part; bundled with
a two-year contract, SoftBank Mobile was
likely to receive at least two years of loyalty
with the installment package.
Additionally, SoftBank Mobile reduced
distributors’ sales commission by 25% to
make this business model more viable. The
installment plan has dramatically reduced
churn, and 80% of all new subscribers
have signed up with the plan. For Q4
2006, SoftBank reported a year-on-year
sales revenue increase of 144.3%, with
operating profits up a staggering 260.4%.
A competitive tariff
strategy
SoftBank Mobile’s pricing strategy is to
attract customers with low voice tariff and
raise overall ARPU by offering the simple
and clear data charges.
Cost-effective voice service plans
On October 24, 2006, Japan launched
the Mobile Number Portability initiative.
SoftBank Mobile had slashed its mobile
voice charges the day before to give free
domestic calls and SMS across its network,
as well as a series of other preferential
fees, to compete with KDDI and NTT
DOCOMO. To maintain quality while
offering free calls, SoftBank Mobile
charged JPY21 per 30 second during
peak hours if the total monthly free call
time between 9:00 am and 1:00 pm
exceeded 200 minutes. Three months after
implementation, SoftBank had signed
up 490,000 new subscribers, the second
largest increase in net adds.
O n Ja n u a r y 1 6 , 2 0 0 7 , So f t Ba n k
Mobile launched the White Plan. With
a monthly base charge of JPY980, this
simple charging plan centered on free
intra-network calls between 1:00 am and
9:00 pm, and JPY21 per 30 second for
other calls. In contrast, the then top two
operators, NTT DOCOMO and KDDI
are running with JPY4,000 monthly base
charge and JPY40 per minute. Within a
quarter of implementing the White Plan,
SoftBank Mobile overtook KDDI to
rank first in Japan with net adds totaling
39.78% of the market.
29 DEC 2009 . ISSUE 53
In just 6 months, White
Plan customers soared to 9
million–60% of SoftBank
Mobile’s total customers.
Double White Plan subscribers
topped 2.7 million. On the
other hand, SoftBank Mobile
launched preferential packages
for both individual and
enterprise users, one of which
gave subscribers to its package
of mobile calls, Internet, and
mobile data service discounts
totaling up to 70%.
On March 1, 2007, SoftBank Mobile
launched the Double White Plan, which
doubled the White Plan’s monthly JPY980
base charge and entitled subscribers to
a 50% discount on calls between 9:00
pm and 1:00 am. On May 10, 2007, it
followed this with the White Plan Family
Discount 24, which allowed free calls
between family members for White Plan
subscribers. In just 6 months, White Plan
customers soared to 9 million–60% of
SoftBank Mobile’s total customers. Double
White Plan subscribers topped 2.7 million,
70% of whom also signed up to the White
Plan Family Discount.
Interestingly, these low price plans only
increased SoftBank Mobile’s MOU to 155,
an increase of just 10 minutes, compared
with NTT DOCOMO’s and KDDI’s
MOU of 140. This demonstrated that
voice prices could be slashed as part of a
profitable price strategy.
Bundled data services
In a departure from KDDI’s “flat rate”
tariff plan and NTT DOCOMO’s “PakeHoudai” usage-based plan, SoftBank
Mobile launched preferential packages for
both individual and enterprise users, one
of which gave subscribers to its package
of mobile calls, Internet, and mobile data
service discounts totaling up to 70%. For
a monthly charge of JPY315, an individual
could receive a combination of SMS
and Internet access services, a reduction
of JPY980 compared with a separate
subscription to each.
SoftBank Mobile also tapped into the
lucrative Netbook “large screen” market,
knowing that doing so would fuel a
great surge in data traffic, burden mobile
backhaul capacity and raise bandwidth
costs. With bandwidth-hungry devices
such as Netbooks, cost reduction became
imperative to enhance its wireless Internet
access services. By consolidating the
group’s subset of services and to provide
rich content, SoftBank Mobile had already
established a unique advantage with its
phone “small screen” services. For large
screen services, the operator partnered
with EMOBILE as its route to success.
Entering Japan’s mobile market in
March 2007, EMOBILE provides the
countr y’s cheapest wireless Internet
access thanks to a range of cutting-edge
technologies. These include distributed
Node Bs and All-IP transmission which
build a cost-effective and efficient HSPA
network. The two operators embarked
on a synergistic partnership that fully
utilized their joining resources under
the parameters of network sharing and
separate pricing. SoftBank Mobile swiftly
expanded its wireless Internet access
services at no extra cost, and EMOBILE
profited considerably from leasing its
network to SoftBank. In February 2009,
SoftBank launched its monthly wireless
Internet access service package at a similar
price to EMOBILE’s.
Diversified mobile
Internet services
Low pricing strategies alone are not
enough to drive profits. To raise ARPU,
operators must offer differentiated services
that are impossible to be copied in the
short-term. SoftBank Mobile believes
storage and functional improvements to
mobile phones will gradually shift fixed
Internet services, like data download,
Huawei Communicate
Email, location, searching engine, and
instant messaging, into the mobile domain
to give unrestricted access.
SoftBank Mobile has as such launched
a series of mobile Internet ser vices:
S!Felica, S!GPS NAVI, S!CAST, S!LOOP,
S!CIT Y and S!Comic. Independent
from mobile data ser vices, these are
being integrated with other resources
of the group to maximize service reach.
For example, by combining Yahoo! BB
and mobile communication capabilities,
SoftBank Mobile has created the mobile
portal, Yahoo! Mobile, to provide content
that users normally expect from fixed
broadband.
Usually used individually and always
on the move, mobile phones facilitate
the mobile social networking services. In
October 2006, SoftBank Mobile unveiled
the world’s first 3 D mobile vir tual
community service, S!Town. Targeted at
girls aged between 18 and 24, S!Town
attracted 100,000 subscribers in just four
months after its launch.
The ser vice allows subscribers to
customize their domain space and avatar
to tour virtual cities, go shopping, play
games, and chat with other subscribers.
Built in a 3D environment, S!Town
extends far beyond texting, photos
and videos to give a completely new
subscriber experience. Payment is usage
based without monthly base charges:
first-time access generates 25KB of data
traffic for JPY40 (0.4USD) and personal
room customization consumes 100KB
for JPY160 (1.6USD). As S!Town also
provides subscribers with links to other
websites, advertising is expected to become
its leading revenue stream.
An impressive brand
strategy
SoftBank Mobile also benefits
considerably from innovative brand
planning and advertising strategies.
According to Commercial Message (CM),
the SoftBank Mobile’s series of “White
Family” ads consistently rank top among
Japanese households. Featuring a Japanese
mother and daughter, a black son, and–
of course–a white Hokkaido dog father,
this innovative ad series has continued to
illustrate the benefits of the White Family
plan since 2007.
Working for SoftBank, the daughter
recommends various products that add
value to the family and bring the brand
to life in a humorous, family-oriented
way. Amongst the public, this has served
to engender trust in SoftBank and its
products, and the characters–notably
the black son and dog dad–have become
celebrities!
As a latecomer to Japan’s 3G arena,
So f t Ba n k h a s r e s h a p e d t h e m a r k e t
landscape and stayed at the forefront of
successful mobile Internet theory and
practice. SoftBank’s success has derived
from its insight into mobile Internet
trends and the implementation of reactive
and innovative business models.
Editor: Xue Hua [email protected]
DEC 2009 . ISSUE 53
30
Business Mode
Successful 3G operation in emerging markets
Successful 3G operation
in emerging markets
Exploring the new turf of emerging markets requires specialized tactics for 3G operations. Mobile environments there can
be vastly different compared to mature markets.
By Pan Fei & Wei Mengjiang
31 DEC 2009 . ISSUE 53
Huawei Communicate
I
t is important that 3G development
in emerging markets matches local
needs, given that user consumption
patterns change with the country.
In most emerging markets, people under
the age of 25 make up 50% or more of
the total population. That means fresh and
cool content and applications and a strong
demand for audio and video entertainment
and social networking. Moreover, growing
needs for information coupled with poor
fixed line and Internet infrastructure creates
an enormous demand for practical, valueadded life enhancing services.
The poor fixed-line infrastructure and
a low PC and Internet penetration rate
makes wireless Internet access via mobile
devices a much more viable solution.
Finally, on average, income is lower
and people tend to have less education
than their counterparts in mature markets.
Prices for services and terminals should be
reasonable and the pricing structure must
be simple and clear.
Subsidized custom
terminals
Take Columbia for an example, most
handsets are priced around 20 to 30USD
and the same goes for India. In Venezuela,
Vergatario handsets that sell for 14USD
are being snapped up as soon as they
come off the assembly line. The core profit
in 3G is the operation of value-added
services, and the terminal experience
directly impacts subscription and the usage
patterns of value-added services.
Good terminals will drive the consumption
of data services. In India, five times more
customers use mobile Internet access
compared to those using PC Internet
access. The primary Internet access method
is via a handset instead of a computer in
many emerging markets. Terminals play
a vital role in pushing forward services.
However, the small-screens and low
powered CPUs in the low-end handsets
that are popular in emerging markets
cannot assure user experience.
Today, the prices of 3G terminals are
still far higher than those of 2G or fixed
terminals. Subsidies are one good solution
for operators to increase the number of
cost-conscious subscribers using 3G.
The largest mobile operator in emerging
markets is China Mobile and they offer
deep discounts on terminals to promote 3G.
Generally, the longer the subsidized contract,
the more subsidies the customer feels they
are getting, but the reality is that the subsidy
rate is actually lower. Long-term contracts
also effectively reduce the churn rate.
Tailored terminals can greatly improve
the service experience, helping operators
to promote services like mobile TV. A TV
shortcut key put on a handset by some
operators makes it easy for subscribers
to watch mobile TV programs and
providing a special screen helps as well.
When a customer turns on his handset,
the customer will see the operator’s screen
and applications and will usually click on
it. This is a proven method for enhancing
customer loyalty and China Mobile for
example, provides a lot of widgets and a
wide range of rich applications.
Recommended 3G services
There are numerous 3G services to
choose from. The following tried and true
services are recommended for operators in
emerging markets.
Mobile music
Mobile music is currently the largest
source of 3G revenue. It has already
developed from simple ring tones and ringback tones to song downloads. At present,
70% of all handsets worldwide support
MP3. This has laid a good foundation
for further development. However, all
consultation organizations have reduced
their revenue forecasts for mobile music
worldwide.
Free music downloads seriously affects
mobile music services. Yet, compared with
mature markets, emerging markets are now
more naturally positioned to develop the
mobile music segment. Low PC and Internet
penetration in emerging markets instead,
puts a bridle on piracy. Since young people
make up a large demographic in emerging
markets and they are voracious consumers,
offering music makes good sense.
In general, emerging markets are not
totally open and educational levels tend
to be lower, making the localization of
services especially important.
The music library at China Mobile,
for instance has over 90% local content.
More importantly, localization should be
reflected in promotion strategies like the
“RBT replication with one keystroke”
function provided by Huawei for Indian
operators Reliance and TTSL.
It is used by over 50% of all subscribers
in India mainly because of low Internet
penetration, in contrast to many other
countries where people mainly order
ringback tones from the Internet.
In emerging markets, the ringback
tone service will remain a popular music
product for a long time. An operator can
integrate ring tones, ringback tones and
whole songs on a portal which pushes
music downloads like Apple’s highly
DEC 2009 . ISSUE 53
32
Business Mode
Successful 3G operation in emerging markets
successful iTunes.
Money on the move
Among numerous mobile value-added
services, mobile money transfers and
banking are targeted in emerging markets.
Financial infrastructure and facilities are
usually under-developed. According to the
World Bank, in 100 countries, over 55%
of adults have no bank account and in 40
countries the figure grows up to 80%.
Eight years ago in Kenya, operator
Safaricom launched the M-PESA (M for
mobile, pesa is Swahili for money) service
to transfer money using a mobile phone. In
that time, the number of customers has risen
from 20,000 to 16 million. Mobile banking
is also doing well in the Philippines. Many
Filipinos working abroad send their earnings
back home with their mobile devices and
with many workers working abroad, such
trend continues upward.
Mobile banking and services alike not
only provide convenience to people’s lives
but also have great cost advantages. In the
Philippines, the fee for bank services is
2.50USD while mobile banking is only
50 cents. In Pakistan, the cost for building
and operating a bank branch is 76 times
more than that for building and operating
a mobile bank.
In the past, mobile banking customers
were most concerned about security.
Now, the data transfer and processing
functionality of 3G handsets is strong
and stable. After encryption and digital
certificates are used, users no longer have
to deal with slow response time and
potential security breaches.
In the past, SMS-based mobile banking
services restricted expansion because of
the indirect methods and complicated
operations. Today, the high bandwidth
of 3G networks and robust 3G handsets
ensure the normal operations of WAPbased mobile banking services, making
them more seamless and convenient.
Mobile TV
Market research indicates that in many
countries, mobile TV is one of the most
desired 3G services. News can be viewed
at any time and exciting sports matches
and concerts will no longer be missed.
33 DEC 2009 . ISSUE 53
The reality is that 3G mobile TV can be
a real headache for operator, especially in
emerging markets. Streaming video and
television require high bandwidth.
This imposes great pressure on a fledgling
3G network and the high bandwidth
requirements will inevitably lead to higher
prices, hindering its popularity. In terms of
financial gains per Mbps of traffic, mobile
TV contributes the least return. Mobile TV
needs to be used in a creative way, to attract
and retain customers, before steer them to
other more profitable services.
Mobile broadband Internet access
Banking and television may not be
suitable for all emerging markets, but
mobile broadband access has broad
applications in most developing markets.
Poor fixed-line infrastructure is common
in most emerging markets. As more and
more people own PCs, they are demanding
higher bandwidth. 3G data card services
are doing well for Vodacom in South
Africa, Mobily in Saudi Arabia, and Claro
in Brazil. Presently, the major challenge
is to match the development of data card
customers with network construction.
Many operators found that after developing
data card services, the subscriber base grew
so rapidly that it caused congestion leading
to a sluggish network response. Then, the
user experience was diminished and the end
result is growing dissatisfaction with the
operator.
Internet services and applications are
the backbone of mobile broadband access.
Given the history of emerging markets, a
wise choice is to ally with content providers
or provide an integrated service platform.
Individual subscriber information and
their consumption and surfing habits are
the most valuable assets and an operator
has a natural advantage in obtaining such
information. It might be best for operators
to keep metrics and other consumer
information close to their vest to assure a
core position in the industrial chain.
Simple flexible pricing
Proper pricing techniques include a
low-price strategy for 3G operation, the
reason being that 3G data services are not
critical to a person’s life and low prices
entice consumers to use them. Generally,
the prices of 3G voice services should not
be higher than 2G voice services with the
prices of 3G data services far lower than the
prices of 2G data services.
The following are two value-added
service package schemes:
Scheme A: Voice is the main product
which is combined with banner 3G
products.
Scheme B: Banner 3G service is the
main product which is combined with free
voice and other services.
In other words, an operator that is
starting 3G operations can use voice services
to drive the consumption of 3G services so
that people can get familiar with 3G. In this
case, scheme A is more appropriate. After a
certain time of development, when valueadded 3G products are widely accepted,
scheme B can be adopted. To stimulate
consumption, subscribers can also get
voucher points according to their amount
of usage to exchange for voice minutes.
For wireless broadband access, based
on handheld devices an unlimited flat rate
plan can work well because the small screen
and low battery capacity of most handsets
naturally decreases the amount of traffic.
For data card service, a flat rate + charge
out of bundle are more appropriate. A flat
rate features a low price to performance
ratio. It is easy to understand and handset
limitations can help prevent bandwidth
abuse. Currently, the flat rate bundled plan
is the most widely applied.
In emerging markets, most customers
have lower requirements, less disposable
income and are not familiar with using data
services. Before a new service is promoted,
a free trial subscription helps enormously.
One example is China Mobile and their
gain of over 40 million subscribers for a
mobile newspaper by offering three months
for free.
There are some general guidelines to
follow before beginning 3G operation in
an emerging market. The most important
thing to do is to apply appropriate
terminals, services and pricing strategies
w h i c h a re l o c a l i ze d , p l u s n e t w o rk ,
branding and channels should also be
taken into account.
Editor: Liu Zhonglin [email protected]
Huawei Communicate
Smart mobile broadband
with differentiated operations
A tidal wave of data, the spike in sales of smart phones and the popularity of mobile broadband plans have fueled
explosive growth in the mobile broadband market. The trick is for operators to maximize profits by capitalizing on the
opportunities of the 3G era and avoid being mere pipes.
By Huang Wangshun
Operational challenges
I
n traditional mobile broadband
o p e r a t i o n s , t h e m o b i l e b e a re r
network is a pipe, without definitive
differentiation of content and data.
Lacking a variety of charging and service
control policies, operators cannot provide
accurate differentiated services based
on customers and applications. With
the increase of mobile customers, more
complex applications, and the convergence
of fixed and mobile networks, operators
are facing challenges like enhancing
profitability, charging capability and
enhancing user experience.
Traffic grows, but not revenue
The traditional growth model where
income grows along with the customers
is no longer sustainable in the 3G age.
On the contrary, the explosive increase
of mobile data traffic makes the costs of
network construction and maintenance
rise exponentially. This is because large
volumes of low-value P2P traffic consume
over 60% of total bandwidth. Traditional
flat rate charging plans also accelerate P2P
traffic.
The tsunami of low-value traffic clogs
networks and impacts other high-value
ser vices, lowering overall QoS, user
experience and satisfaction. Because of the
mercurial nature of active and idle hours
for P2P traffic, operators can not concisely
plan and construct networks.
Simple charging mode
The fast growth of the mobile Internet
results in diversified services and complex
charging requirements. Existing charging
systems are now challenged by the new
requirements.
For example, high-value applications
like stock trading and small money
transfers require real-time authentication
and payment. Users also want to know
their consumption details and real-time
bills.
Operators also want to have a real-time
control mechanism to avoid the risk of
outstanding bills. In addition, they need
real-time credit control to prevent any
fraud that might happen in the complex
value chain. In addition to providing
customers with tailored data and video
services, an operator must also take into
account the appropriate charging mode.
Ensure user experience
Standardized operations and excellent
service are the core competitive edges.
During operations, the frequency of usage
and loyalty of customers depend on their
experience and this has an immediate
effect on an operator’s bottom line. User
experience also is enhanced by offering
unique services, rich content, a fair price
point and fast access.
Operators need to divide customer
segments according to customer
DEC 2009 . ISSUE 53
34
Business Mode
Smart mobile broadband with differentiated operations
BOSS
OCS
SCP
Service
analysis center
Advertising
platform
Unified portal
Service operation layer
Service control layer
Operation
analysis center
GPRS/UMTS
TD-SCDMA
LTE
WiMAX/Wi-Fi
Content
charging
Service
records
Service
logics
Internet
Intranet
Service
bearer layer
Speedup
configuration
SCG=Service Control Gateway
Fig. 1 Topology for differentiated mobile broadband operation
requirements. Then, configure, deliver
and implement policies, roll out services
to meet diversified and personalized
requirements and launch attractive services
quickly. Operators can also adopt flexible
pricing and incentive policies to guarantee
QoE and create value.
Differentiated operation
sets the trend
The content recognition and service
awareness of deep package inspection
(DPI), together with its wide deployment
in mobile broadband networks, help
operators with differentiated operations.
It combines personalized ser vice
control, content charging, customer
behavioral analysis, content optimization,
personalized services and security.
Differentiated bandwidth control
The adage of “bandwidth is service” is
the basis of differentiated operation in that
the operator allocates bandwidth resources
35 DEC 2009 . ISSUE 53
with preference given to high-value
services and high-end customers.
By analyzing services consumed and
the corresponding bandwidth required,
operators can intelligently schedule to
optimize network traffic and guarantee
the bandwidth requirements of different
customers.
For high-end customers, operators can
bind P2P services with high bandwidth so
that the service experience is guaranteed
when the customers order P2P service. For
low-end customers, operators can limit the
P2P bandwidth in busy hours according
to the network load and impose no limit
when network load is not heavy. For illegal
P2P traffic and low-value P2P traffic, a
blocking policy can be adopted to lower
user experience and the impact of lowvalue traffic.
Diversified charging
Traditional duration or traffic based
charging mode no longer works for
differentiated operation in the mobile
Internet. Flexible charging based on
customer, traffic and content appears to be
the inevitable trend.
European operators started charging
for content early on. With contentbased charging, the uplink and downlink
packets of a customer are filtered and
analyzed to differentiate the type of
content transferred, and then send related
information to the prepaid or postpaid
charging system for flexible processing.
Content-based charging enables operators
to provide more segmented value-added
services and more precise billing. The end
result in most cases is more profit and a
higher customer satisfaction.
Differentiated operation model
After a lot of new customers join a
network, the operator should segment
customer requirements and adjust their
operating strategy to find a new business
model. For example, if customers can
modify their packaged services online,
it is more interactive and this enhances
satisfaction, ultimately increases ARPU,
market share and revenue.
Huawei Communicate
Advertising is important and the ad
must be precisely targeted to be effective.
Success is predicated on the coverage of ad
recipients and the timing and precision of
the advertising.
Business intelligent technology
monitors traffic in real time and analyzes
user consumption and purchasing potential
to help identify customer preferences of
services and products. Mobile advertising
is a valuable tool and in the right hands
can add innovation and revenue.
Service network support
The typical service network model
can be broken down to a service bearer
layer, a service control layer and a service
operation layer, as shown in Fig. 1.
The service bearer layer is the traffic
delivery channel and implements the
differentiated operation policies. It consists
of ser vice control gateways (SCGs),
including the WAP gateway, web gateway,
and content charging gateway (CCG).
The SCGs process and control WAP1.x,
WAP2.0, HTTP, streaming, Email, FTP
and P2P services.
The bearer layer implements service
control policies for charging, adapts
and enhances contents. It also controls
bandwidth and access, plus has antivirus
protection. The bearer layer also
provides the service operation layer with
information related to service operation
for service analysis.
The service control layer is the
management center for service policies.
The center has unified policy management
and delivers the policies to the entire
network for immediate implementation.
This layer helps to clarify the capability of
the service bearer layer and contributes to
unified service.
The service operation layer consists of
an operation analysis center, an advertising
platform (value-added service platform)
and portals. The operation analysis center
obtains service data (like URLs) from
the bearer layer for deep mining and
analysis, identifies services and customers,
provides reference for policy creation,
and differentiates services and customers.
The advertising and value-added service
platforms can then pinpoint specific
services and goods to advertise.
Building a smart pipe
Differentiation as previously outlined,
can make good use of limited resources
to provide quality pipe services. Taking
advantage of a large customer base and
the rich services of a mobile network,
operators can avoid being a dumb pipe
with more proactive operations.
Bandwidth on demand
Bandwidth control identifies individual
customer requirements and allocates
different bandwidth and service control
policies according to their levels and
service usage. Packages are differentiated
a c c o rd i n g t o c u s t o m e r a n d s e r v i c e
attributes, and operators can use the SCG
and the operation management center to
control bandwidth and adjust fees.
In a typical operations model,
customers are divided into gold, silver and
bronze levels.
Gold-level: P2P services are allowed
with limited bandwidth (BitTorrent =
2Mbps, P2P = 2Mbps).
Silver-level: P2P ser vices are also
allowed, but with less bandwidth
(BitTorrent = 2Mbps, P2P = 1Mbps).
Bronze: only HTTP services are offered
without BitTorrent and P2P access.
Different pricing policies are defined
to match the service packages and realize
bandwidth on demand.
Vodafone UK started 3G bandwidth
control in 2007. Customer satisfaction
and revenue rose with an ARPU increase
of 12%. The bandwidth control policy of
PCCW defines a 5GB threshold. When
a customer’s P2P monthly traffic exceeds
5GB, data speed will be limited and
prioritized for the high-value services.
Flexible content charging
Content charging modes include:
flat rate, traffic-based, duration-based,
calculation-based and content-based.
MegaFon started SCG deployment in
2008 and implemented different charging
policies according to customer contracts
and service attributes. Take level-based
charging for example, MegaFon has
different charging policies to combine
different traffic, duration, fixed rates and
content. This helps to ensure the growth of
higher-value services like Email, streaming
media and music. Also, MegaFon prevents
the use of accounts with insufficient
balance, which enhances its mobile data
revenue by 20%.
Precise marketing and service
innovation
An operator can deploy platforms
including SCG, operation management
center, operation analysis center and
mobile advertising platform to target
marketing efforts.
The SCG collects original access data
(URL) of customers and sends the data
to the operation analysis center. Then,
the operation analysis center analyzes the
consumption and buying potential of the
customers to identify their interests and
preferences.
Hi g h - va l u e c u s t o m e r s a n d h i g h value services are differentiated, creating
not only new business models, but an
opportunity to introduce hot new services.
The operator then adjusts ser vice
policies according to the analysis and
releases the new policies to the operation
management center, which delivers
the new operation policies including
bandwidth control and pricing policies
to the SCG. Based on the customer
behavioral analysis, the operator can use
the mobile advertising platform for ad
targeting.
Operator M deployed its operation
analysis center and mobile advertising
p l a t f o r m i n e a r l y 2 0 0 9 t o m e a s u re
customers and traffic by types like sports,
finance, automobile, travel, and food.
Through pricing and control policies,
Operator M developed high-value services,
such as Mp3, trip and sport. Then they
delivered precise ads to selected people
with special interests in music, movie and
sports. As a result, Operator M actually
increased its customer base and revenue
amid the economic downturn.
Editor: Chen Yuhong [email protected]
DEC 2009 . ISSUE 53
36
Business Mode
Mobile broadband: more than just a price war
Mobile
broadband
more than just
a price war
Homogeneous competition
tends to degenerate into a
price war to win customers.
However, for operators, is
it an inevitable trade off
for them to leverage profits
through terminal subsidy,
low prices, and discounts for
attracting subscribers?
By Bai Ju
37 DEC 2009 . ISSUE 53
Price is not the only weapon
W
hile mobile broadband
services have developed
steadily over recent years,
mobile broadband access
is still in its infancy stages. Currently,
subscribers are attracted by Internet
content, services and applications, and
mobile broadband access is simply a way
of getting connected.
Mobile operators lack a strong
involvement in what mobile Internet
actually provides and remain focused on
lowering the price of broadband. However,
doing so devolves competition into a price
war, which should never be operators’
only option. Instead, differentiated pricing
structures can represent a flexible charging
policy that works as part of a competitive
mobile broadband access strategy.
Pricing strategies first consider dimension
and then mode. Charging dimensions cover
traffic, duration, content, service level, time,
and distance etc. The three most common
dimensions for mobile broadband are
traffic, duration, and QoS. The first two
can be used together and integrated with
different QoS levels.
Traffic-based charging
Charging based on data traffic is the
most widely applied method for mobile
broadband. Although traffic volumes are
defined, it is difficult for subscribers to
control or calculate their data usage levels
or expenditure. Many operators have
sought to solve this issue by providing
online data traffic estimates that allow
subscribers to select a data package based
on individual consumption habits such
as daily Internet usage and downloaded
content.
Huawei Communicate
Howe ve r, t h i s m o d e l i s f a r f ro m
satisfactory as subscribers still do not know
how much traffic they have used and may
get a shock when their bill arrives. To
increase transparency, operators can set
up systems for subscribers to keep track of
and manage their expenditure. This can
be done through SMS statements, limit
reminders, or automatic package upgrades
if a limit is reached.
China Unicom currently offers three
monthly mobile broadband packages:
22USD for 3GB, 29USD for 5GB, and
44USD for 10GB, with 1.5 US cent
charged for each excess MB. If a customer
has purchased the 3G package but uses
4.5GB in a particular month, the package
automatically upgrades to 5GB at 29USD
rather than charging 44USD for the basic
package plus the excess.
Duration-based charging
Based on online hours or days, durationbased charging is easier for subscribers
to understand and accept and is usually
implemented in two ways: First, a fixed
daily rate regardless of actual usage, such
as 2.6USD for a day, or 10USD for a
week. Second, online duration charging is
based on actual online time and typically
includes a validity period and an excess rate.
For example, an operator offers a 30-day
package at 12.9USD that allows 10 hours of
access (accumulate online duration). Excess
use is charged at 5 US cents per minute and
the package expires after 30 days.
China Mobile Beijing originally set up
traffic-based monthly packages, including
3USD for 150MB, 7USD for 500MB,
15USD for 2GB, and 29USD for 5GB.
However, this model is difficult for
subscribers to understand. Consequently,
China Mobile Beijing launched two
duration-based monthly mobile broadband
packages in July 2009: 9USD for 60
hours; and 18USD for 240 hours, which
includes 3 hours national roaming.
Duration-based charging is complex
and subject to abuse–subscribers can
exploit a high speed 3G network and
generate huge amounts of traffic. A
fair usage policy is needed to eliminate
excessive traffic by identifying when a
Charge
C3
A1
Pay as you go
B
Charge cap
C1
Flat rate + charge
out of bundle
C2
Unlimited flat rate
A2
Pay as you go with
descending rates
Flat rate with usage cap
Usage
(traffic or duration)
Fig. 1 Charging modes of mobile broadband access
given threshold is exceeded and then
increasing the chargeable fee or slowing
the access rate. The system can detect if a
subscriber is online, record the duration,
and mitigate idle use when a subscriber has
not disconnected but is inactive.
QoS-based charging
QoS-based charging charges higher
fees for better products and services. For
example, operator E offers two packages at
different access rates: Standard Unlimited
p r ov i d e s 3 8 4 K b p s f o r 2 6 U S D a n d
Premium Unlimited 7.2Mbps for 52
USD; after 6GB traffic is reached, the rate
is limited to 64Kbps.
QoS-based charging originates from
fixed broadband access rates. However, the
erratic air interface rate of mobile networks
complicates the wide application of QoSbased charging for mobile broadband.
Though not yet mature, QoS-based
charging is worth further consideration
and is likely to be widely applied as mobile
technology develops.
Tailored charging
Operators can apply differentiated
pricing policies through a range of charging
modes. Many have launched unlimited flat
rate packages to attract new subscribers.
While effective, such packages result in
huge amounts of traffic. One operator, for
example, increased its subscriber base by
28% in just one year, which in turn sent
traffic into the stratosphere with a twentyfold increase!
Statistics reveal that flat rate subscribers
generate five times, while unlimited flat
rate subscribers produce 50 times, more
data traffic than pay as you go subscribers;
this also encourages large volumes of
P2P traffic. To guarantee high network
p e r f o r m a n c e a n d a vo i d e x h a u s t i n g
network resources with low-value P2P
traffic, operators require a charging mode
that both attracts subscribers and guards
network resources.
Fig.1 lists the charging modes of mobile
broadband access and demonstrates the
relationship between expenses and service
usage. A1 and A2 are pay as you go modes;
A2 is more complex, but encourages
higher usage. B implements a charge cap
based on A1. Though high, this cap is
designed to prevent shockingly high bills.
C2 is the simplest and most attractive
to subscribers, but creates large network
loads. C2 should be used for short-term
promotions or bundled with fair usage
policies that curtail a subscriber’s access
when traffic exceeds a defined limit. Based
on C2, C3 effectively avoids the misuse of
network resources, but not user friendly.
Thus, C1 is recommended as it sets a limit
and charges an excess fee if this limit is
exceeded.
In practice, charging modes can be
combined to create more complex charging
modes that maximize both customer
satisfaction and returns for operators.
Editor: Xu Peng [email protected]
DEC 2009 . ISSUE 53
38
Network Strategy
Synergies boost mobile broadband
Synergies boost
mobile broadband
By Zhang Ping & He Zhichao
The emergence of mobile Internet has been accompanied by a
continuous stream of new services, intelligent terminals, and
application stores. Acting in combination, these cause data traffic
to soar to a level that will lead to more complex risks in network
and operation than the voice era. Synergy between networks and
services has become one of the preconditions of success.
39 DEC 2009 . ISSUE 53
Huawei Communicate
A sticky dilemma
M
obile broadband is an
integral part of modern life
and is gradually altering
everyday communication,
business activities, entertainment, and
access to information.
Operators are concerned with how
mobile services can generate meaningful
re t u r n s w h i l e s a t i s f y i n g s u b s c r i b e r
requirements. Intense competition and the
new uncharted world of mobile broadband
started a race among operators to build
networks and offer innovative services. But
then, it comes with endless adjustments
on service development and network
expansion.
Operator P fought its way from
challenger to victor in the mobile
broadband market it operates in. Within
just 4 months of commercializing its
network the operator had attracted over 1
million 3G subscribers, 300,000 of whom
signed up for mobile broadband.
However, such the swift increase in
users coupled with a wider service array
swamped operator P’s network. Resource
consumption far exceeded predicted levels.
Therefore, degraded quality and reliability
suddenly became very real threats as the
capacity ceiling came into view. Urgent
network expansion and adjustment
became frequent need.
Faced with increasing operational
complexity and network management
experience limitations, operator P together
with Huawei established a joint team to
evaluate its mobile broadband network
in terms of traffic patterns, network
behaviors, key to profitability, cost
baselines, risk minimization, and E2E
quality optimization.
Synergy: the sum beats
the parts
Based on the understanding of E2E
planning, the joint team comprehensively
analyzed the traffic of the mobile
broadband network of operator P, and,
in combination with Huawei’s global
experience in network deployment,
Based on the understanding
of E2E planning, the joint
team comprehensively
analyzed the traffic of the
mobile broadband network
of operator P, and resolved
the problems regarding two
aspects: synergy of network
and service development
and synergy across the
entire network.
resolved the problems of operator P
regarding following two aspects.
First, synergy of network and service
development: After throughput analysis
and data mining, the joint team identified
traffic patterns and subscriber behaviors.
At the same time, combining with network
performance and cost breakdown, the
estimation of service delivery cost per MB
will be provided and tariff package was
evaluated respectively. All these analysis
results offer a sound proof for operator P
to adjust its operation strategies, and find
new revenue point of innovation service.
Second, synergy across the entire
network: based on future throughput
estimation, the joint team conducted a
comprehensive network evaluation, and
identified potential resource bottlenecks
and risks. Moreover, combining with data
mining on network behaviors, elaborate
network configuration and solution
optimization have been suggested to
ensure E2E network quality.
Synergizing network and service
development
Operators possess a wealth of
methodologies, knowledge, and experience
regarding the behaviors of voice subscribers
and its impact on network capacity. Data
traffic, however, brings uncertainty on
the relationship between network KPIs
and subscriber behavior due to diverse
service types, large traffic volumes, and
unpredictable subscriber behaviors. In
particular, the prevalence of flat rates and
lower service tariffs have encouraged users
to consume more bandwidth. Data from
Huawei shows that traffic under a flat rate
exceeds that generated under traditional
PAYG by between 20 and 50 times.
Indeed, operator P’s lowered prices and
flat rates had increased traffic dramatically,
which impacted all aspects of its broadband
network, including the wireless access
network, the IP backhaul and the core
network (CN). As network visualization is
impossible in current mobile broadband
systems, it is tough to monitor subscriber
behaviors and throughput status. To bypass
this restriction, the joint team adopted
temporal and spatial domain aggregation
d u r i n g d a t a m i n i n g t o f u l l y re v e a l
network behaviors and characteristics, the
relationship between traffic and subscriber
numbers, rate patterns for individual
subscribers, traffic distribution between
different services, major online periods,
average usage time, and preferred service
types.
The results showed that 62% of all
traffic was P2P, 27% was web, and that
the uplink and downlink split was 26%
and 74% respectively. Moreover, it
became evident that several previously
reliable traffic benchmarks had changed
significantly. For example, 20–25% of
traffic in traditional voice networks occurs
at peak times; however, in operator P’s
network, this had dropped to less than
8%, almost half the predicted 15%. This
also shows the current trend in which daily
usage patterns are flattening, with traffic
averaging 5–7% of all traffic throughout
the day in every typical area.
Operator P employed the outputted
data to evaluate key service performance
and plan new services based on market
conditions. Thus, it could synergize its
network with business development.
Moreover, operator P can accurately
make out the service delivery cost (cost/
MB) with certain depreciation periods,
based on characteristics of the network
and subscriber behaviors, equipment
performance, and the composition of
network costs. Service delivery costs were
used to develop pricing strategies for
different operations. This was formulated
DEC 2009 . ISSUE 53
40
Network Strategy
Synergies boost mobile broadband
40
Incremental network cost
€/Month
35
30
28
0.002 €/MB
25
20
20.48
15
10
Mixed data allowance
5
0
Basic data allowance
GB/Sub/Month
1
2
3
4
5
6
7
8
9
10
11
Fig. 1 Tariff package assessment mode based on network performance and costs
against a transparent backdrop of network
capabilities and the profitability of highend and low-end tariff packages.
Fig. 1 shows that the proportion of
5GB and 10GB tariff packages gave
the mixed data allowance of 6.3GB for
operator P, which was less than the basic
data allowance of 7GB in the existing
network. With a service delivery cost of
€0.002/MB, this model estimates the cost
of various packages and thus indicates
profit space. For example, the cost of a
10GB package is 0.002×1024×10=€20.48,
€7.52 lower than its current price, which
shows that this business model is profitable
and well aligned with operations.
Synergy across the entire network
Fro m d a y o n e , o p e r a t o r P w a s
destined to be a leading domestic mobile
broadband provider. While supplying
content-rich data services at affordable
prices is important in a climate of intense
competition, successful operations entail
more than suitable pricing and competing
effectively with fixed broadband services.
Subscriber experience and service quality
have to be very good, which in turn
necessitates the synergistic planning and
configuration across the entire network. To
satisfy E2E network quality requirements,
all network interfaces should satisfy specific
subscriber throughput requirements and
absorb cumulative delays.
However, planning methods for
41 DEC 2009 . ISSUE 53
units and interfaces across the entire
network vary based on different network
characteristics. For example, the RAN
relies heavily on wireless environments,
its speed is inconsistent, and delays are
unpredictable. Conversely, throughput
in the core network is high, the network
environment is stable, and delays are low.
Having fully assessed operator P’s
network characteristics and problems in
different layer, such as uneven service
distribution and unstable traffic flow, the
team focused on achieving synergy for
traffic matching between interfaces and
utilizing core network elements (NEs)
across the entire network, and used active
and passive KPIs to assess resources and
network characteristics in different layer,
thus to realize systemic risk analyses,
resource re-allocation and configuration
were conducted across the entire network.
To realize more specific fine tuning, the
team monitored loads on key interfaces
and NEs and estimated network capacity
and NE usage. In combination with
the analyses, service load forecasting,
E2E network capacity adjustment and
resources allocation were conducted,
which eliminated the potential network
bottlenecks and risk and finally improved
the network performance.
Mo r e o v e r, s y n e r g i s t i c p l a n n i n g
principles were applied to the entire
network and data mining provided the
basis for QoS and QoE assessments. The
joint team provided customized parameter
configurations to fine-tune operations and
elevate QoE. As a result, enhanced resource
utilization now targets subscriber segments
as required, has raised overall QoS, and
guaranteed high priority subscriber
groups appropriate levels of service. Thus,
operator P’s operations have become more
coherent, systematic and efficient, which
has boosted its brand equity in the market.
Along with the continuous increase
of traffic and network loads, more and
more reliability and security problems had
been exposed in operator P’s network.
Based on the trend of traffic growth and
forecast of risk points, the joint team also
formulated a flexible pool networking
solution for operator P’s network. The
solution dynamically satisfies operator
P’s requirements on network reliability
through averting network risks at a
reasonable network cost.
Future synergies
After months of cooperative efforts,
the joint team had clearly understood the
traffic distribution, subscriber behavior
characteristics and other operation patterns
of operator P’s network, and provided
guidance to mobile broadband services
of the operator through synergy between
the network and business development
and among the entire network. The
joint team helped the operator support
the rapid and strong growth of mobile
b ro a d b a n d s e r v i c e s , a vo i d n e t w o rk
resource bottlenecks with reasonable
network resources, and realize customized
fine operation and network configuration
to further improve subscriber satisfaction.
Huawei will continue to apply its
expertise to future mobile broadband
development and help realize operators’
network visualization, capacity matching,
and network adjustment goals. Fine
operations can be achieved by routine
network early-warning systems that evade
the network and operational risks posed by
soaring broadband traffic volumes. Thus,
synergy has emerged as the cornerstone of
competitiveness in the fiercely contested
mobile broadband market.
Editor: Li Xuefeng [email protected]
Huawei Communicate
Building cost effective
mobile broadband networks
Mobile broadband services have seen increased traffic but the revenues have lagged behind. Operators need to adopt
new strategies to build low-cost, high-performance mobile broadband networks.
By Chi Zhentao
B
Building a 2-layer mobile
network
realizing these services are high.
y July 2007, over 150 million
Operators are considering building
terminals had accessed HSPAa 2-layer network to divert the traffic
based mobile broadband
of different services and guarantee user
networks around the world. The
fast-growing mobile broadband usage has
Mobile broadband data services can be experience. In this way, the costs for
generated much more traffic yet stagnant divided into high-value and low-value. High- providing low-value services with the most
or nearly stagnant revenues.
value services are those that can be deployed traffic can be significantly reduced and overall
In t h e Eu ro p e a n m a rk e t , m o b i l e by operators who charge commissions, operation costs can be significantly cut.
As shown in Fig. 1, layer 1 of a 2-layer
broadband traffic has surged after 3G such as stock traders and payment services
operators began offering flat rate packages like PayPal. Low-value services are Internet network is a traditional mobile network for
with unlimited access. Analysis shows that services, particularly P2P services which carrying high-value services and providing
full mobility, QoS and billing support.
if mobile broadband traffic grows by 50 to consume a lot of bandwidth.
100 times, revenues will only increase by
Cu r r e n t l y, 8 0 % o f d a t a s e r v i c e s Layer 2 is a low-cost mobile network for
10 to 20% correspondingly.
provided by mobile operators are low-value carrying low-value services and providing
Mobile broadband services are mainly Internet services. Whether high-value or inferior mobility, QoS and billing support.
The core idea for 2-layer networks is
based on Internet access with wireless low-value services, they are delivered on
data cards and mobile phones. These mobile broadband networks with high to divert the traffic of low-value services
connections result in low-profit margins. mobility and QoS. The overall costs for from that of high-value services. Different
With disappointing revenues,
operators are reluctant to
build and operate mobile
Layer 1: Network for high-value services
broadband networks, which
could negatively impact the
High-value
Backbone
Backhaul
industry chain.
services
It is becoming crucial to
Node B
RNC
SGSN
GGSN
VAS
the bottom line for operators
to adopt new strategies
for building low-cost,
high-performance mobile
broadband networks. This
involves constructing a wireless
Internet
broadband access network with
Backhaul+Backbone
Low-value
sound coverage and smooth
Wi-Fi
services
evolution capability, a low-cost
backhaul, a highly efficient
Layer 2: Network for low-value services
mobile packet core network,
as well as a flexible bandwidth
Fig. 1 2-layer mobile network
control mechanism.
DEC 2009 . ISSUE 53
42
Network Strategy
Building cost effective mobile broadband networks
diversion points can be selected in actual
deployment.
First, diversion takes place on the terminal
side. At hotspots with high data traffic, more
and more operators are using Wi-Fi networks
to divert traffic generated by low-value services
due to tight resources and reduce costs for
expanding traditional mobile networks.
Traffic generated by terminals supporting
Wi-Fi is carried by Wi-Fi networks instead
of the traditional mobile networks. Actual
deployment is not without its challenges
such as: integrating Wi-Fi networks and
mobile networks with minimum impact on
user experience and resolving difficulties in
Wi-Fi network planning and maintenance.
Second, traffic is diverted on the network
side. Diversion may be realized at Node Bs,
RNCs, or between RNCs and SGSN.
Traffic that has been diverted will not go
through subsequent nodes of traditional
mobile networks, thus eliminating the
costs for expanding the nodes. Different
points of diversion may lead to different
cost reductions but also difficulties in
deployment and varied impact on user
experience.
Compared with diversion at RNCs,
diversion at Node Bs saves more in
network expansion costs, but provides no
mobility across Node Bs. Operators should
consider current network conditions, cost
reduction targets and user experience to
decide on which point to diverge traffic.
Reducing backhaul costs
Backhauls are the most important
part of mobile broadband networks.
With the development and evolution of
mobile broadband to HSPA and LTE,
an increasing number of base stations are
delivering higher bandwidth and expanded
mobile backhauls, but costs are higher.
Currently, the major target of mobile
backhaul solutions is to reduce the
transmission cost per bit to address traffic
growth. Mobile backhauls using optical
cables, microwaves and copper cables
represent different evolutionary trends, and
some new technologies are being considered
for introduction to mobile backhauls for
their outstanding cost effectiveness.
Mobile backhauls using optical cables
43 DEC 2009 . ISSUE 53
feature the lowest transmission cost per
bit. For integrated operators, it is the best
choice to build mobile backhauls with the
existing optical cables. Mobile backhauls,
which use PTN and can sufficiently
support the evolution of mobile broadband
to All-IP, will be a major option.
Moreover, GPON and EPON allow
multiple links to share the resources (optical
cables) of the same physical layer and will
be an option for mobile backhauls. In
MANs, FMC allows integrated operators
to use the same metro bearer network
for both fixed and mobile services and
dramatically cut operating costs.
Mobile backhauls using microwaves
feature fast deployment and low costs.
Currently, about 60% of base stations
worldwide use microwaves for backhauling.
Microwave-based mobile backhauls use
packet technologies to improve bandwidth
usage. Also, self-adaptive cross polarization
interference cancellation (XPIC) is used to
improve spectrum efficiencies and increase
the throughput. New bands like E-Band are
used to realize throughput of over 1G for high
broadband microwave mobile backhauls.
Because copper or twisted pair
c a b l e s h a v e b e e n w i d e l y d e p l oy e d ,
mobile backhauls using such cables are
also a typical trend. Through multilink bundling, a number of DSLs are
bundled to satisfy LTE requirements for
the bandwidth of mobile backhauls. For
example, five pairs of VDSL2 twisted pair
cables can provide a high-speed virtual
channel of 0.5G. Though copper cables
cannot substitute for optical cables,
they can be used as a supplement to an
integrated mobile backhaul solution.
If there are no optical or copper
cables in mobile backhauls, operators
can consider using wireless resources,
such as WiMAX and a self-backhaul, to
reduce transmission costs. A wireless selfbackhaul has such advantages as nonline-of-sight (NLOS) transmission and
quick deployment. This is a creative and
efficient way to build mobile backhauls.
For example, idle TDD bands can be used
for the backhaul of small base stations.
Moreover, operators are deploying diverted
transmission on the existing networks. xDSL
or FE interfaces are added to Node Bs to
divert data of HSDPA and HSUPA, while
traditional voice and high-quality services are
still carried on E1 links. For example, with
this strategy France Telecom is implementing
diverted transmission for its mobile
backhauls on its several local 3G networks.
Controlling bandwidth
flexibly
Another approach to resolving increasing
traffic issues and stagnant revenues from
broadband services is to apply flexible
bandwidth control to divert resources to highvalue services and users. Operating costs are
reduced through the efficient use of resources.
The approach involves: first, shifting
resources to high-value services and users
to ensure the QoE for most users on the
network; second, balancing the usage
of network resources during peak and
idle hours; and third, guaranteeing an
appropriate level of QoS based on user
behaviors and service features.
For flat rate subscribers, for example,
P2P services are low-value and consume a
lot of network resources, and thus should
be appropriately controlled.
The approach above relies on flexible
bandwidth control mechanisms. Currently,
3GPP has defined the policy and charging
control (PCC) as the bandwidth control
architecture. This architecture is being
recognized by more and more operators,
including Vodafone, Telefonica and T-Mobile.
If a mobile network is likened to an
expressway, it is an unmanaged freeway
before the introduction of the PCC and
the actual throughput may be far smaller
than the effective throughput. After the
introduction of the PCC, the expressway is
now efficiently divided into fast and slow
lanes with speed limits and regulations and
the tolls are being collected.
The introduction of this particular
flexible broadband control mechanism
allows dynamic control over the service
type, user location, cumulative traffic, busy
and idle hours and network load. It also
introduces intelligent management for
effective use of resources and reduces costs
for expanding mobile broadband networks
pressured by increased traffic.
Editor: Liu Zhonglin [email protected]
Huawei Communicate
Mitigating interference
between LTE and 2G/3G networks
Radio interference is one of the key factors affecting the quality of wireless networks. As wireless communications
technologies have developed, networks of different frequency bands and standards operating in the same region have
become commonplace. Interference between wireless networks has grown more troublesome. When operators start to
deploy LTE networks, how can operators address the more complex type of interference between wireless networks?
By Sun Jingfei
Challenges of wireless
interference
A
ll of the signals emitted
by a w i re l e s s n e t w o rk a re
interference to another and this
is particularly true when the
networks use adjacent frequencies. This
kind of interference will affect the quality
of networks, impair user experience and
even cause network failures in extreme
circumstances.
Currently, many operators are trying
to cope with interference between their
own 2G and 3G networks. The frequency
bands used by some 2G networks often
overlap those of other 2G networks and
3G networks.
For example, the CDMA downlink
frequency band partially overlaps the
uplink frequency band for Extended GSM
(EGSM), causing marked interference.
Many operators use 900MHz for UMTS,
but the frequency bands of GSM900
and UMTS900 are close to each other, as
those of GSM1900 and UMTS1900, and
interference is inevitable in such situation.
In the near future, most operators
in the world will face a more complex
situation with 2G, 3G and LTE networks
coexisting.
LT E h a s m a n y s p e c t r a l o p t i o n s .
DEC 2009 . ISSUE 53
44
Solution
Mitigating interference between LTE and 2G/3G networks
Frequency bands specified for LTE include 700MHz,
900MHz, 1800MHz, 2100MHz and 2600MHz.
These frequency bands are very close to those of
existing 2G and 3G networks and some even partially
overlap those of 2G and 3G networks. As a result,
radio interference inevitably exists between 2G, 3G
and LTE networks. Along with the rapid growth of
wireless communications, spectrums have become
increasingly scarce. More and more spectrums will
be refarmed, causing greater co-channel and adjacent
channel interference between wireless networks.
Interference between wireless networks has
become a prime concern for operators and equipment
suppliers. Many large companies are currently
researching the issue and solutions are evolving.
Solutions for typical scenarios
When a new LTE network is built, it is necessary
to analyze the current use of frequency bands in 2G
and 3G networks. The analysis is intended to give
early warnings to possible interference scenarios
and help formulate preventive measures. If there are
interference risks, the most direct mitigation measure
is to reserve a guard band between two wireless
communication networks. This can minimize
interference, but it may also waste frequency
resources. The actual width of a guard band depends
on the anti-interference capability of equipment and
the amount of interference from existing networks.
Filters and spatial isolation are needed in some
extreme situations. For example, the CDMA850
frequency band already interferes with that of
EGSM880, but LTE requires EGSM880. Co-sites
45 DEC 2009 . ISSUE 53
and co-channels are also among the typical scenarios
that cause interference.
Co-site interference
Operators have invested heavily in 2G, 3G and
LTE networks. Costs can be considerably reduced
if it is possible to utilize the resources of existing
2G and 3G networks by sharing sites with the LTE
network. In this scenario, the most pressing problem
for operators is to combat co-site interference.
Solutions have matured, like the co-site adjacent
channel interference solution. Take UMTS and
GSM for example. The bandwidth assigned to
UMTS and GSM are standard-compliant and also
adjacent. UMTS is given the 5MHz, while GSM
is given the 200KHz band. In this case, no guard
band is provided, but interference is controllable and
network performance is not affected.
In a co-site adjacent channel construction of
UMTS900 and GSM900 networks, because the
spectrum resources are limited, a solution with an
operator bandwidth of 4.2MHz can be used by
UMTS900, to ensure the capability and quality
of GSM networks. The decreased bandwidth of a
guard band can increase available frequency bands
to GSM900 and the performance loss due to
interference is acceptable.
60% of operators in Europe use 12.5MHz for the
900MHz frequency band, while 50% of operators
in the Asia-Pacific region use 6–10MHz for the
900MHz frequency band. In this case, if a 3G
network uses a frequency band for a 2G network, the
3G network can use a bandwidth smaller than the
standard one, while ensuring the capacity and quality
Huawei Communicate
of the 2G network. Along with network
evolution, the method for controlling cosite interference between GSM and UMTS
can also be used in the co-site construction
for GSM, UMTS and LTE networks to
control interference between the three.
Co-channel interference
Geographical isolation zones can
be used to counter interference where
different wireless networks use the same
frequency bands. For example, after the
frequency band of GSM900 is refarmed
to UMTS900 in rural areas, the same
spectrum is used by UMTS900 in rural
areas and GSM900 in urban areas, causing
a great deal of interference. It is possible
to have an isolation zone using another
frequency between the two areas. GSM900
networks in urban areas can then gradually
evolve to UMTS900 or LTE in the future.
To improve 3G coverage in r ural
areas, Optus in Australia has refarmed
part of the GSM900 frequency band to
UMTS900. Compared with 2100MHz,
the 900MHz frequency band has many
inherent advantages, such as better indoor
coverage, and double the coverage of
2100MHz. The 900MHz frequency band
can notably reduce the number of base
stations, facilitating network construction
and development.
Because UMTS900 networks deployed
in rural areas will strongly interfere with
GSM900 networks in rural areas, isolation
zones are set up between GSM900 and
UMTS900 networks. With this approach
to building UMTS900 networks,
performance is guaranteed and interference
controlled. After implementation,
operators can not only streamline their
operations but also gain an advantageous
strategic position.
Experience in 3G deployment can be
used to deploy LTE networks beginning
with hotspots. In the future, subscribers
using GSM900 networks in urban areas
will gradually decrease or turn to other
networks, so the GSM900 frequency band
can be retained for LTE. The existing antiinterference solutions are inherited and
existing investment is protected.
Other interference
There are still many other complex
scenarios involving interference. Take
the new UMTS2100 network at Vivo in
Brazil for example. The network was found
being affected by existing networks such as
GSM1900, CDMA1900 and DECT1900.
After analysis, the interference problem
was resolved with five customized filters.
When Vietnam’s HT Mobile swapped
its CDMA800 network to EGSM, the
uplink frequency of EGSM was adjacent
to the downlink frequency of CDMA800
of other operators. To eliminate the
interference between the two types of
networks, HT Mobile used filters in
some places after analyzing frequency
assignment.
In the proposed UMTS850 (refarming
of the AMPS spectrum) network
construction, Thailand’s DTAC realized
that the downlink frequency was adjacent
to the uplink frequency of the existing
GSM900 network. The interference
between the two networks was then
effectively eliminated with corresponding
solutions.
LTE network building will create more
complex interference problems in the
future. Huawei has conducted in-depth
research and gained rich experience in
eliminating interference caused by the
coexistence of 2G, 3G and LTE networks,
and the co-channel and adjacent-channel
interference between wireless networks.
Huawei provides optimal anti-interference
solutions through spatial isolation,
equipment isolation, guard bands and
other approaches.
Inter ference has long been a key
concern for both operators and equipment
suppliers. Fortunately, when 2G, 3G and
LTE networks coexist in the future there are
viable solutions to eliminate interference.
To save money and maximize benefits
during the construction of LTE networks,
it is highly important for operators to
tailor optimal solutions for all issues and
potentialities from the very beginning.
Editor: Wang Hongjun [email protected]
If there are interference risks, the most direct mitigation measure
is to reserve a guard band between two wireless communication
networks. This can minimize interference, but it may also waste
frequency resources. The actual width of a guard band depends
on the anti-interference capability of equipment and the amount
of interference from existing networks.
DEC 2009 . ISSUE 53
46
Solution
Bridging multinational operations
Bridging multinational operations
By Lin Peixing & Li Rong
G
lobalization and informatization
coupled with unbalanced
development in international
telecom markets have both
challenged and opened up markets around
the world. The trend continues with many
powerful operators expanding through
multinational operations.
Multinational operators focus on
markets and use capital through mergers
to consolidate their global or regional
leadership. They also control and utilize
network resources in a centralized manner
to offer nonreplicable core technologies
and business models, while improving
customer loyalty, reducing costs and
increasing profits.
However, expansion and multinational
operation is not without risk and it is a
wise move for operators to improve their
odds and quickly build up their overall
competitive edge.
47 DEC 2009 . ISSUE 53
Growing pains
There are four major obstacles to
s u c c e s s f u l l y b re a k i n g i n t o t h e f a s t
developing multinational telecom markets
and grabbing some of the gold.
How to capture international
roaming revenues?
A large number of subscribers use
roaming service between countries and
particularly between different regions within
a country. Many tourists use it as well and
international traffic revenues are increasing
rapidly. According to TeleGeography,
operator revenue from international traffic
has steadily increased for the last 5 years
and should continue to do so, and 2007
alone saw the wholesale and retail revenue
reaching 11.5 billion USD and 78 billion
USD respectively. Wholesale international
traffic accounted for 56% of the total traffic
around the world, increasing nearly 10%
compared to 2004.
Revenues from the international
roaming market have also witnessed rapid
growth. According to reports from 3G
Americas and Informa Telecoms, revenues
from international roaming ser vices
reached 2 billion USD in 2008 in Latin
America. The revenues in the first half of
2009 exceeded those of the same period of
2008 despite the economic downturn.
The lucrative international traffic and
roaming markets have attracted a lot of
VoIP and IT service providers like Skype
and Google Voice, which offer cheap
and even free roaming services. Facing
promising markets with strong competition,
multinational operators have to seriously
consider the costs of service provision.
The growth of international traffic increases
the requirements for interconnection between
Huawei Communicate
the sub-networks of multinational operators
and the networks of other long-distance
operators. Interconnection costs are high. If
multinational operators can consolidate the
international traffic of all sub-networks and
interconnect their networks with those of
other long-distance operators, their bargaining
power is greater and costs are reduced.
Multinational operators usually have
various international routes available to
wholesale their international traffic and
different international routes feature
different prices and voice quality. The
trick is to get the best voice quality
w i t h t h e l ow e s t c o s t i n t e r n a t i o n a l
routing. Operators can then attract the
international traffic of local operators to
achieve growth in both the international
traffic wholesale and retail markets.
Besides, inter-network settlement can
be minimized only when roaming traffic is
kept in the sub-networks of multinational
operators to the greatest possible extent.
This way, service costs can be effectively
reduced and the profitable roaming
services are not transferred.
How to reduce TCO through
centralized management?
The early sub-networks of multinational
operators usually lacked unified planning and
construction. The diversified technologies
and complex structures were not scalable
enough, and there were difficulties in
interconnecting and interworking. This
resulted in higher operational costs and it
became obvious that network structures
needed optimization. Therefore, unified
network deployment policies and subnetwork construction standards are needed
to help perform system planning, reduce the
TCO, and construct secure, efficient and
centrally managed networks.
How to provide convergent brand
and user experience?
Many sub-networks of multinational
operators are obtained through merger
and acquisition. These sub-networks
have different service platforms and a
long period of service launch. Although
various services are available, no unified
and distinctive brands are provided, so
there is no unified customer experience.
Different service platforms stand alone to
the detriment of the multinational brand
and user loyalty.
To b e s u c c e s s f u l , m u l t i n a t i o n a l
operators need to build unified service
platforms, shorten the provisioning of new
services, maintain technical leadership
and establish a competitive edge with
differentiated services.
How to build an edge in MNC
ICT market ?
In c re a s i n g l y m o re m u l t i n a t i o n a l
companies are emerging and expanding,
bringing a stronger demand for ICT.
In addition to telecom operators,
IBM and other professional IT service
companies also are competing to provide
profitable ICT services for multinational
companies in the fast growing markets.
For multinational operators, the greatest
challenge is to prevent their networks from
becoming low-value pipelines, through
which professional IT service companies
get the bulk of service profits.
ICT services for multinational companies
pose extremely high requirements for
the comprehensive capabilities of service
providers. Providers not only need to
provide these valuable customers with
unified network platforms but also develop
more abundant, professional and secure
services based on the networks. How can
multinational operators provide better
services by effectively using the networks
covering various regions?
Unification is the key
Multinational operators can construct
unified core networks, IP bearer networks,
unified network management systems
(NMSs) and open service platforms to
smooth the bumpy information highway.
Unified core networks
To satisfy the growing multinational
traffic, one recommendation is that operators
deploy unified core networks across multiple
countries to effectively reduce roaming costs
and optimize routing options.
First, multinational long-distance core
networks make it possible to build unified
multinational service platforms which help
operators provide services under a unified
brand.
Second, multinational long-distance
core networks can enhance the bargaining
power of operators, who can consolidate the
international traffic of all operating companies
for lower interconnection prices with other
international long-distance operators.
These prices will be far lower than those
obtained by the operating companies
alone. With unified core networks,
multinational operators can select lowp r i c e ro u t e s t o s a ve c o s t s b a s e d o n
commitments (such as QoS) to end users.
Third, with unified multinational longdistance core networks, operators can collect
information on international roaming users,
analyze their consumption patterns and offer
tailored service packages. This approach can
not only effectively reduce the expense of
roaming users, but also keep international
traffic in the operator’s network.
When constructing multinational longdistance core networks, operators need
to focus on the following issues: network
architecture that meets IP trends; high
network reliability, security, operability,
manageability and maintainability; simple
and clear settlement between operating
companies; optimized routing options for
interconnection with networks of other
international long-distance operators.
American Movil started constructing
the Long-Distance International (LDI)
network for 15 sub-networks in Latin
America and Miami in 2009. This was
the first multinational long-distance core
network in the industry. Tier-1 operators
such as Vodafone, Telefonica and Zain
also plan to construct multinational longdistance core networks in 2010.
Unified IP bearer networks
The greatest advantages of IP bearer
networks lie in low costs, high bandwidth,
easy deployment and easy maintenance. In
multinational operations, unified IP bearer
networks can effectively reduce network
construction costs. Multinational longdistance bearer networks carry services,
including international long-distance voice
and Internet traffic. The points below
should be considered when constructing
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Solution
Bridging multinational operations
multinational long-distance bearer networks.
Division of planes and layers: Two
planes are logically defined, with one for
real-time services, such as voice calls and
VPN and the other for non-real-time
Internet services. The two planes work
in the active/standby mode to ensure
uninterrupted services. Two layers are used
to strengthen the network scalability and
minimize impacts on service networks
(for example, definition of faults, capacity
expansion, and upgrade). The entire IP
bearer network is divided into the service
access layer and the IP backbone layer.
Logical and physical topology: The
logical topology of the IP backbone is set
according to actual physical transmission
links, including the access router, border
router and core router. Access routers are
usually customer edge (CE) routers and
should be set as close as possible to service
nodes such as the MGW, SoftX, SG, HLR,
RNC, SGSN and GGSN. Border routers
are usually provider edge (PE) routers
between access routers and core routers.
They are convergence points of access
routers and are responsible for establishing
the VPN channels of bearer networks.
Core routers are usually provider routers,
which are regional switch centers. Core
routers are placed based on transmission
resources between major cities.
Unified NMSs
Multinational networks involve a
wide range of network elements (NEs).
Unified NMSs will help improve the
O&M efficiency. A unified NMS enables
multinational operators to easily locate faults.
Once a fault occurs or the voice QoS is lower
than the expected level, an early warning will
be generated so that the operator can quickly
identify the impact and location of the fault.
This reduces or avoids costs due to internal
coordination between different O&M teams
such as the core network O&M team and
the IP network O&M team.
Besides NEs such as the softswitch,
MGW, and SBC in the core network, CE
routers for voice access can also be managed
by the unified core network NMS. This
reduces internal coordination costs for
locating voice faults on IP networks and
improves the O&M efficiency.
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For a unified NMS covering dozens
of countries, the multinational O&M
solution should support role and domain
based management.
For example, the O&M team at the
headquarters of a multinational operator
can configure, manage and monitor all
network NEs, while the sub-network
maintenance personnel maintain only the
NEs of their sub-networks. A role can
be assigned by the system administrator
for operations on the NEs of other subnetworks. For example: queries for network
topology and the NE configuration.
Multinational operators also need
unified NMSs to quickly and conveniently
get network operation conditions,
including information about overall
network operation, such as BHCA, ERL
and call completion ratio; NE information
such as CPU usage, memor y usage,
BHCA and ERL; link information like
voice quality; as well as multinational
statistical reports showing traffic between
sub-networks, between sub-networks and
networks of long-distance operators, and
between regions and enterprises.
This requires the NMSs to have rich
statistical functionality for monitoring
the entire network. By monitoring the
entire network or NEs, the NMSs allow
multinational operators to take necessary
steps lest performance indices such as
BHCA, ERL and voice quality deteriorate.
Measures like call restriction and adjustment
of international traffic routes can be
implemented to ensure proper network
operation and guaranteed revenues.
Unified service delivery platform
Service delivery platforms (SDPs) help
operators set up Internet and mobile
content oriented platforms that quickly
introduce, deploy and innovate services;
build open, collaborative and controllable
environments for content convergence,
distribution and marketing; and support
value chain integration and the service/
business model transformation required by
operators for industrial convergence.
The SDP has been recognized by the
industry as a powerful tool for providing
differentiated services for “one-stop
shopping” by users. Practices show that
the SDP can shorten the period of service
innovation from 5–12 months to 5–8
weeks, significantly reducing creation and
operational costs for services.
American Movil has set up a unified
open SDP as a part of its efforts to
integrate the regional operations of 17 subnetworks in Latin America. The platform
integrates network devices, post-paid and
prepaid systems from various vendors for
SPs, multinational companies and large
Internet companies to provide value-added
services like: instant messaging, Ovi store,
and open market to millions of subscribers
in Latin America.
Unified communications
Operators wishing to compete in the
ICT service market for multinational
companies must have strengths in network
infrastructure, operational experience,
professional services and branding. Operators
can start with unified communications (UC)
for multinational companies that require
frequent internal communications to save
costs, make communication more efficient
and meet their needs for UC that integrates
data, voice and video.
Huawei’s eSpace enables PC portals
to synchronize with users’ mobile phone
numbers. It provides IM, VoIP and instant
conferencing, plus realizes the same SMS
and MMS functions as mobile phones. With
the plug-ins, eSpace integrates enterprise
BBS, enterprise search and other frequently
used office information services. Enterprises
are better served with improved employee
efficiency and reduced costs while customer
loyalty is enhanced, traffic increases and the
ARPU of enterprise users goes up.
When pre-installed, eSpace helps
to promote seamless and constant
communications by combining 3G data
cards, the Wi-Fi function integrated
through USB dongles and the roaming
features of the IMS.
Since eSpace enables mobile phones
and PC clients to use the same numbers,
multinational operators can develop various
bundled value-added services for enterprise
customers and attract high-end customers
to strengthen their competitiveness in the
enterprise markets.
Editor: Xue Hua [email protected]
Huawei Communicate
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