ISSUE 802/2011

Digicel adding more value to mobile devices

Huawei’s Single Strategy maximizing operator asset values

Vodafone Spain providesreal value to SMEs

China Unicom scores high during Asian Games 2010

Voice from Operators Tao of BusinessPerspective Winners

TeliaSonera on LTE and more

Ahead of the curve

As the mobile broadband boom is sweeping the world, downlink speeds on the mobile network have increased 2,000-fold over the past seven or eight years. In comparison, it took the fixed network two decades to achieve this level. Total mobile data traffic has now exceeded voice traffic and will double every year over the following five years. It is estimated that in 2015, mobile broadband will be the choice of 3.5 billion of the world’s four billion broadband subscribers.

With a dynamic market of this size, it is not surprising that global operators and consumers have come to expect more of broadband mobile networks. In emerging and developed markets alike, higher bandwidth at a lower cost per bit is sought. With the introduction of new technologies, architectures and ideas such as HSPA and LTE, consumers will finally be able to enjoy more affordable mobile services at higher speeds and with better QoE.

Stories abound about pioneers of these new technologies. Scandinavian operator TeliaSonera took the brave step of deploying the first LTE networks in Sweden and Norway, and as the world’s first operator to have ever commercialized LTE, set an example for other global players. It will be joined by Telenor who is upgrading its mobile architecture comprehensively to cover 6,500 sites by the end of 2011 for the coming LTE era.

Mobile broadband is facilitated by new methods that include spectral efficiency improvement through new technologies and new hotspot coverage. China Unicom has, after more than one year of WCDMA coverage efforts, come up with a total solution that implements three-dimensional coverage in dense urban areas, precision coverage in mobile scenarios, deep indoor coverage, and complementary WLAN coverage, paving the way for further mobile broadband development. Its achievement was best demonstrated in the Guangzhou Asiad, to which its WCDMA network brought incredible convenience and fun.

When basic coverage is achieved, operators will turn to content for the competitive edge. They will also foray into other areas by leveraging their advantages, as Vodafone Spain is doing in the SME market.

To ensure that mobile broadband is a profitable and sustainable business for operators, Huawei has introduced the end-to-end Single Strategy by building on its SingleRAN solution. It is an optimal combination of ways of improving efficiencies and maximizing the value of operator assets across the board.

Mobile broadband is now upon us and will surely make the world a better place.

Mobile broadband rides an unstoppable wave

Sponsor Huawei Technologies Co., Ltd.

Publisher Huawei COMMUNICATE Editorial Board

Consultants Hu Houkun, Xu Zhijun, Xu Wenwei

Yu Chengdong, Zhang Hongxi, Zhu Yonggang

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

Editors Xue Hua, Julia Yao, Long Ji, Michael Huang

Joyce Fan, Zhu Wenli, Ranajit Sankar Dam, Xu Ping

Xu Peng, Li Xuefeng, Chen Yuhong, Pan Tao

Mike Bossick, Gary Maidment

Art EditorZhou Shumin

ContributorsCai Mengbo, Zhao Yuan, Hou Lin, Zhang Ming, Chen Hao

Zhang Qinfa, Yang Xin, Wang Jian, Liu Ting, Qi Xiao

David Fernandez, Zhang Kui, Shao Feng, Wesley Wei

Oscar Claudio, Li Xin, Wang Yang, Zhang Wei

Shen Wei, Yu Rongchun, Li Jiazan, Chen Tao, Cai Lingyu

E-mail: HWtech@huawei.com

Tel: +86 755 28789348, 28789343

Fax: +86 755 28787923

Address: B1, Huawei Industrial Base,

Bantian, Longgang, Shenzhen 518129, China

Publication registration No.: Yue B No.10148

Copyright © Huawei Technologies Co., Ltd. 2011. All rights reserved.No part of this document may be reproduced or transmitted in any form or by any means without prior written consent of Huawei Technologies Co., Ltd.

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

Yu ChengdongPresident of Huawei Global

Solution Sales Dept.

For electronic version and subscription, please visit www.huawei.com/winwin

It's all about success! We aim to help you hearwhat operators would like to share in person,see how industry peers succeed in the fierce market, delve into their secret to success, and learn from the winners in the industry.

WHAT’S INSIDE

Telenor Serbia: Rising to the challenge11

Economic crisis? Check. Stiff competition? Check. Low mobile usage? Check. Others might be fazed, but not CEO Kjell-Morten Johnsen, who says the operator, currently second in Serbia and first in mobile broadband, can strengthen its position while it prepares for the coming LTE revolution.

Ahead of the curve: TeliaSonera on launching LTE, and more

01

Becoming the first operator in the world to deploy LTE was no small feat. In a freewheeling interview, Group President & CEO Lars Nyberg talks details: pricing strategies, the producing-versus-aggregating debate, and how LTE is dramatically reshaping the industry.

STC makes the IPTV leap07

Last year the operator, KSA’s leading provider of telecom services, launched the country’s first IPTV service. Maziad Al Harbi, General Manager, Network Services Solutions at STC, discusses the operator’s IPTV strategy as it attempts to accelerate broadband adoption through new offerings.

Voice from Operators

02/2011Issue 8

Telenor Norway: Gearing up for LTE37

China Unicom: Taking network coverage to the next level

47

Telefónica o2 Germany:Improving service innovation through service network optimization

40

Online video: The pursuit of profitability29

Three mobile broadband myths busted26

Huawei’s Single Strategy maximizing operator asset values

23

Perspective

Winners

TeliaSonera: Faster is better33

A sharper edge for Bite43

Tao of Business

Digicel: Adding more value to mobile devices

17

Operating in 32 marketsaround the world, Digicel is responding actively tocustomers’ demands for more functionalities on their terminals. Thomas Bryant, Vice President of Global Operations at Digicel, shares the operator’s mobile device strategy.

Vodafone Spain: Providing real value to SMEs21

“The SME market does not hold much glamour for most CMOs, but in Spain, for us, it does.” Cristina Rivas, Vodafone Spain’s Marketing Director of Enterprise Business Unit talks about why and how the operator is making this segment a priority.

Mobily: Managed services in the mobile broadband era

14

Three years ago, Mobily, the Saudi Arabian operator that ran the world’s busiest mobile broadband network, opted for managed services. Ashraf Ismail Mohamed Ibrahim, VP of Managed Services, talks about how it has helped sustain business growth, and what lies ahead.

China Unicom Guangdong scores high during Asian Games

52

Win-Win / FEB 20111

— Lars Nyberg, President and CEO of TeliaSonera Group

LTE didn’t need to be a commercial success within 12 months. I’m convinced it will be a success in due course. What I cared about was that we were the first to deploy it, we were the first to gain experience in it, and we knew more about it than others.

VOICEFROM OPERATORS

Win-Win / FEB 20112

eliaSonera, despite being the incumbent operator in Sweden, has dared to take risks and pursue paths quite different from its peers. These include the deployment of LTE in

Sweden and Norway, which placed the operator firmly in the global spotlight for becoming the first in the world to commercially launch LTE.

The pioneer of LTE

WinWin: To many, TeliaSonera’s biggest move in the last two years was becoming the world’s first operator to commercially launch LTE. Didn’t you think it was too early to introduce it? Can you tell us about the experience so far?

Nyberg: We started [our commercial LTE services] in Oslo and Stockholm in December 2009. Some competitors have claimed that we just did it to raise our profile and draw some attention. They’re partly correct. TeliaSonera has been a pioneer in mobile communication. It was important for us from an image perspective, and also to gain some early experience in LTE. It didn’t need to be a commercial success within 12 months. I’m convinced it will be a success in due course. What I cared about was that we were the first to deploy it, we were the first to gain experience in it, and we knew more about it than others.

Technically, we have made a lot of progress. We currently offer our customers in Sweden and Norway LTE with mobile broadband speeds of up to 100Mbps. The LTE network rollout continues in Sweden and Norway. We will have covered 28 Swedish cities and ski resorts by the end of 2010 in Sweden alone.

Unlike most CEOs, TeliaSonera’s Lars Nyberg is a straight shooter, unafraid to frankly air his views as he cuts through the cloud of management jargon. The company he runs is, unsurprisingly, equally unconventional. In this freewheeling interview with WinWin, Nyberg talks about what makes him – and his company – different.

In November and December 2010, we launched the first commercial LTE services in Finland and Denmark respectively. We also have LTE pilot network installations for customers in Lithuania, Estonia and Latvia and have made live LTE connections in Uzbekistan and Kazakhstan. It doesn’t mean that we will rush to deploy LTE in the Baltic countries, but it was worth getting an early start, just so that we could acquire knowledge about this technology.

WinWin: Some would argue LTE deployment at this stage is not justified from the return-on-investment perspective. So where does your confidence come from?

Nyberg: There is no doubt in my mind that LTE will be a technical success. Now it remains to be seen if it becomes a financial success. We may have to wait at least until the middle of 2011 to find out. But if you look at the history, you’ll see it’s going to be a success.

I firmly believe that consumers have an unlimited appetite for bandwidth. This is our first and foremost assumption. We had a telecom industry before the smartphone, and we now

By Julia Yao

T

TeliaSonera on launching LTE, and moreAhead of the curve

Win-Win / FEB 2011

VOICEFROM OPERATORS

3

I firmly believe that consumers have an unlimited appetite for bandwidth. This is our first and foremost assumption. We had a telecom industry before the smartphone,

and we now have a totally different industry after the smartphone.

have a totally different industry after the smartphone. People are not using the phone to just talk any more. I now travel without a PC, because I can work efficiently without one. Just today, over a period of two hours, I sent emails, talked to our PR person in Finland and so on. And I did it all on one small piece of equipment, called the smartphone.

I think five years from now, all phones in the Nordic and Baltic markets will be smartphones. What happens in those markets today often happens later in the rest of the world. This means all phones in the world will be smartphones 10 or 15 years from now. [The users] are going to demand higher speeds and more bandwidth. In fact, they are demanding more bandwidth now. For example, I still cannot see people when I talk to them. I think it’s just a matter of time before I am able to.

WinWin: I agree that the appetite for bandwidth is

always growing. But will tariffs be an obstacle to market adoption?

Nyberg: I don’t think it will be that expensive for consumers, because vendors have to follow Moore’s Law: You provide double capacity at the same cost every 18 months. The capacity will increase, but costs will remain the same.

The equipment we buy from vendors forms only part of the cost. Setting up sites, however, forms a bigger piece. Since we are an established mobile operator, we found we could reuse 70% of existing sites for LTE rollout in Sweden. That has given us a big cost advantage.

No more flat rates

WinWin: As mobile traffic soars, telcos are finding

TeliaSonera conducted a survey among its LTE customers, on their first 100 days of using the first LTE offered in the world. As might be expected, the results of the survey showed that the people who jumped on the LTE bandwagon first were those who were already interested in technology. More than 90% upgraded from an already existing 3G subscription and 43% had an iPhone. The majority of the people in the survey, 65%, acquired LTE to complement their fixed broadband. And 54% would not consider

returning to 3G at present.New surfing habits:

• 26% said they were working more on a

mobile basis.

• 23% said they were downloading larger

files to a greater extent than previously.

• 19% say they were watching online

TV/streaming movies.

• 16% said they began surfing more after

acquiring LTE.

LTE Changing Online HabitsSource: http://teliasonera4g. com

Win-Win / FEB 20114

We have to have some differentiation in price. If you want to use a lot more, you need to pay a little more. We have to make sure people don’t use

more capacity than we have.

with AT&T will not be allowed to happen here.We have to make sure people don’t use more capacity

than we have. I can do it in two ways. I can do traffic shaping, which is sad, as all of a sudden, your phone becomes slow. Or I can do it by pricing. I raise the price for high volumes, and 50% of people could say: “I’m not going to pay for that.” Fine. Wait 18 months, and you will get it for nothing. Right now, if you don’t want to pay, it’s fine, my network will be OK.

WinWin: How have your customers responded to differentiated pricing so far? And will that reduce the edge you have over your competitors?

Nyberg: Customers seem to be fine about our differentiated pricing. We have received no customer complaints about that. Sometimes our customers use up

flat rates unsustainable. TeliaSonera, being a leader in mobile broadband, has been actively evolving its mobile broadband pricing to meet market needs. What is your view on the changing pricing model?

Nyberg: The flat rate was a good way to get started, so we didn’t scare people off initially. But there is this extreme difference between heavy users and normal users. There are kids who download films, and they can take down the whole cell. It’s not fair. We have to have some differentiation in price. If you want to use a lot more, you need to pay a little more.

I think a lot of operators understand that. Because the appetite is unlimited, people will use up as much as is given to them. We will double capacity every 18 months, but during that process, we need to be sure they don’t bring down our networks. What happened in Manhattan

Win-Win / FEB 20115

VOICEFROM OPERATORS

their capacity before the end of the month. They can top up, but most don’t. They just wait.

There are still flat rates available in the market though. But I’m not worried. Really heavy users make up maybe 2% of the market. Should one of my competitors have a flat rate, I’ll be glad to send them the 2%. They will be in trouble, I guess. Then they will learn they don’t want the flat model. I believe most operators realize that the flat rate is not a good model for our industry.

To produce or aggregate?

WinWin: How important are content and applications to TeliaSonera’s overall strategy?

Nyberg: Content is extremely important to my customers, because that is what makes them stay on the Internet and use my network. The fundamental question is: What is TeliaSonera’s role in content? There, my opinions differ from some people.

In a way, I would love to be a great content provider. But I have realized that TeliaSonera is not well-suited to being a content provider. We can be a content aggregator. We can take content from other people, and package it, and deliver it to you. But should we be generating content? NO. We should be a telecom operator. Apple’s App Store has been a success. But we are not Apple. I think they [operators] need to sink a lot of money into it be successful. But it’s not TeliaSonera’s strength.

WinWin: In Sweden, TeliaSonera has a deal with Spotify to allow customers to download unlimited music for a fixed monthly fee, with the service provider given bandwidth priority. Is this a profitable revenue model now, and are you planning to apply this template to other content and application providers as well?

Nyberg: Being a content aggregator is what TeliaSonera

We are just a content aggregator, focusing on making our pipe efficient and cost-effective. The “dumb pipe” is a very sophisticated and technically complicated pipe.

As long as you manage the pipe well, whether dumb or smart, you make money.

would like to be. We don’t write the music, record the music or even have any agreements with those who make the music. What we have is the agreement with Spotify. We package the music and make it easier for customers to access with a fixed amount of money. People love it. It increases traffic. There are two kinds of revenue generated from this service. One is traffic revenue which we don’t share. The other is revenue for the service, from which we take a small piece. We don’t make money on that.

The service attracts customers to TeliaSonera. It raises traffic on the network, for which our customers are paying. And hopefully it’s a good business model for Spotify, and also the people who actually write music. And I expect to use this model more often for other content and applications.

Here we are just a content aggregator, focusing on making our pipe efficient and cost-effective. People talk about “dumb pipe” and “smart pipe”. The “dumb pipe” is often seen as stupid and bad. I don’t believe that. The “dumb pipe” is a very sophisticated and technically complicated pipe. As long as you manage the pipe well, whether dumb or smart, you make money.

Rocking the boat

WinWin: Since joining the company in 2007, you have been driving change within the organization. Tell us about the last three years: What have been your biggest achievements and challenges, and what lessons have you learnt in this period of time?

Nyberg: We have changed a lot in the last two years. TeliaSonera was a successful company when I joined, but a bit slow and inward-looking, possessing very much an incumbent culture. I’m the one who rocked the boat.

It may sound arrogant, but I’m really happy with the changes [that I brought about], and even surprised. The main enabler of this change was bringing in new people,

Win-Win / FEB 20116

It may sound arrogant, but I’m really happy with the changes that I brought about, and even surprised. The main enabler of this change was bringing

in new people, not only external, but also internal.

Editor: Gao Xianrui sally@huawei.com

not only external, but also internal. At Level 2 and Level 3 management, half of the people have been replaced, by people from outside and inside. This has proved to be very successful.

It has been a huge challenge. People didn’t want change, and I needed to convince them. I’m happy that enough were convinced to get the ship moving. We regularly conduct a survey of employee commitment. In 2007, 60% of our employees said, “Yes, I am committed.” In 2009, that number went up to 68%. Very few companies have that level of commitment. I’m very proud of the improved employee commitment survey results.

WinWin: You mentioned three priorities in your company: quality of network, world-class customer service, and competitive cost structure. Which one tops your priority list?

Nyberg: I have been pushing our new management to make sure we have a competitive cost structure. I think we are sort of on par with some of our competitors. So I can tick it off from my priority list.

I think our biggest challenge is providing world-class customer service. It’s really hard. As an incumbent, we have cumbersome IT systems. Also, a lot of people think it’s about the customer service people. But customer service people are at the very end of the process. Of all the calls they get, about 40% are what we call “unwanted calls,” calls that customers make because of a mistake on our part. For example, we send you an invoice that you cannot read, and you call us. Take another example. We said: “OK. Your service will start on Friday.” Then it doesn’t happen on Friday, and you call us. Then we say it will happen on Monday, and it doesn’t happen. And you call again. That’s two “unwanted” calls. If we do it right the first time, we wouldn’t have any calls at all. How do we fix and avoid these mistakes? That’s the challenge.

We have the best customer satisfaction scores in many of the countries we operate in. But I’ll be honest: It’s not

because we are so good, it’s because our competitors are even worse. The question is how TeliaSonera can achieve world-class customer service. I hope we can succeed, and then we will be unbeatable.

WinWin: Synergy is always sought after by multinational telcos. Operating in 20 markets in the Nordic and Baltic countries, and the emerging markets of Eurasia, how does TeliaSonera leverage the synergies within the group?

Nyberg: We have not started synergy in Eurasia, only in the Baltic and Nordic markets. Historically we have built our networks nationwide in each country very independently from other countries. The question is: Why should national borders put limits on our networks? Only 1.5 million people live in Estonia. Why do we need to have a totally independent network in Estonia? Can we not share across borders? We are working to see how much of the infrastructure can be shared.

The best example, though it’s not going to save much money, is something called Network Operating Center (NOC). We need two NOCs in every country. Why can’t we have two NOCs for eight countries? We save six NOCs. NOCs are manned 24 hours a day. But I don’t know the answer yet; I’m just asking the question.

It’s neither a technical issue, nor a regulatory issue. It’s mostly a cultural issue. Every country has totally independent operation. The management in those countries have to think twice, before they say, “OK. We have our own sales operation and marketing operations, but our network is managed somewhere else.”

We are trying to see if we can run mobile networks across borders as one network, although they have been viewed as eight networks so far. We have a lot of overlap between countries, and we can save money. So, I believe there are synergies, and we will pursue them.

Win-Win / FEB 2011

Not content with just being the Kingdom of Saudi Arabia’s leading provider of telecommunication services, Saudi Telecom Company (STC) added IPTV to its portfolio on July 31 2010, by launching the country’s first IPTV service. Maziad Al Harbi, General Manager, Network Services Solutions at STC, talks about STC’s IPTV strategy and the benefits it is expected to bring to all parties.

Entering the living room

ne of STC’s strategic priorities is to reinvent home communications by accelerating broadband adoption through multi-play and converged offerings. The launch of IPTV has

brought STC customers one step closer to the Home of the Future.

WinWin: Congratulations on launching Saudi’s first IPTV service, InVision. How does IPTV fit in STC’s overall business strategy?

Harbi: We have defined our future strategic priorities as a long-term plan composed of seven dimensions referred to as FORWARD. The “R” in the acronym stands for “re-invent home communication,” which aims to accelerate broadband adoption through multi-play and convergent

O

STC makes the IPTV leap

By Julia Yao

VOICEFROM OPERATORS

offerings while driving high-quality deployment and effective sales.

To achieve this “R” goal, we are striving to accelerate the dissemination of broadband by providing high-quality, multi-purpose bundled offers. STC has many popular and flexible double play, voice and broadband packages. We have recently launched the InVision package. It is the first ever fixed triple-play bundle offering in Saudi Arabia. The offering includes free unlimited calls, unlimited Internet at speeds that reach up to 20Mbps, IPTV and satellite channels. Indeed, InVision is a critical component in STC’s plan to reinvent home communications and to revolutionize the entertainment experience in the Saudi home.

WinWin: The shift from voice to data requires significant investment in network and technology. Can you tell us about STC’s network preparations related to IPTV deployment?

7

Win-Win / FEB 2011

There are no cinemas in Saudi Arabia. So the attractiveness of IPTV mainly stems from the vast and growing video catalogue, and that is the primary

reason why STC has focused a lot on VOD.

Harbi: To accommodate high-speed Internet and offer integrated Internet solutions, STC in 2008 launched the fiber to the home (FTTH) service for Internet at speeds of up to 100Mbps– another first in the KSA. We also initiated the commissioning and installation of many more Multi-Service Access Node (MSAN) as roadside cabinets, across all the major cities in the KSA. Thus, we are able to provide high-quality services with high speeds reaching up to 20Mbps through our most popular AFAQ DSL Shamel broadband package.

In order to further enhance customer satisfaction, Quality of Service (QoS), Quality of Experience (QoE) and to assure service delivery, we invested in an end-to-end (E2E) IPTV centric monitoring solution as part of our overall Next Generation Operation Support System (NGOSS) Strategy. In 2010, STC was selected as the winner of the prestigious TM Forum award for its leading edge NGOSS design, beating many major players like China Unicom and Vodafone.

WinWin: Can you briefly describe your IPTV service offerings, and how the customers have responded so far?

Harbi: InVision was launched on July 31, 2010 (during the month of Ramadan) in the cities of Riyadh, Jeddah and Dammam. Customers have responded very well to the service, and there have been reports where people were queuing to subscribe.

The InVision service has an extensive range of services and features; from the electronic program guide (EPG), linear TV, time-shift TV, TV on demand, Video on Demand (VOD), PVR and so on. As you probably know, there are no cinemas in Saudi Arabia. So the attractiveness of IPTV mainly stems from the vast and growing video catalogue, and that is the primary reason why STC has focused a lot on VOD. Our VOD contains a diverse library of the latest Arab, Hollywood, international blockbuster films and popular TV drama series. We

also have a carefully selected range of live TV channels featuring content, in both standard definition (SD) and high definition (HD) that has been designed to appeal to the KSA market. The major components in the channel offering, are a good mix of Arabic and English language programs which are made up of sport, children, religious, news and science programs, with Arabic and English subtitles.

Time-shift TV is another popular service. It allows customers to retrieve any program broadcast within the last seven days on any TV channel through catch-up TV technology. This service enables customers to watch any program they are interested in at their own convenience, which means they can, for example, perform their regular prayers at the correct times, and not be concerned about missing anything on TV. In fact, according to our constant customer feedback surveys, a large majority of our InVision customers admitted that it was unimaginable for them to now even contemplate TV without catch-up and time-shift TV. This has created a true paradigm shift in the TV experience.

WinWin: According to STC’s experience, what are the key components of IPTV success?

Harbi: I would like to highlight the three most important components to achieving IPTV success. First is broadband network capability, as mentioned earlier. Then of course, platform capability. Here the important partnership between STC and Huawei was a crucial factor. For the aforementioned components, we had already laid a very solid base. However, the third, which I personally feel is the most important and vital component is content. Content is really the key, to first attracting, then gaining and of course retaining customers. In 2009, we established a daughter company called Intigral to act as our content arm. Intigral provides multitude of services ranging from content aggregation, creation, enhancing, monitoring, censorship, delivery, and promotion.

8

Win-Win / FEB 2011

WinWin: How do you plan to take your IPTV service forward?

Harbi: The IPTV platform is a very futuristic platform that offers unlimited possibilities for new services. When we initially launched InVision, we were strictly focused on the basics. Now, our primary focus is to introduce much more on top of the platform. But, we must first carefully analyze which services will be profitable or not. We will not fall into the “one size fits all” approach, It is a fact that different services work better in different cultures and countries.

We are witnessing some early signs of the anticipated boom in the market and customers. Because, we were able to anticipate this and so we are in very advanced stages of planning to launch many advanced services to run over InVision. The services are either as good or better than what many in the market are offering or promising to offer. The recently much publicized offerings by GoogleTV and AppleTV gave us a very timely confidence jump that we are defiantly going in the right direction.

The pleasant consequence of what I mentioned earlier, we have had to accelerate our expansion plans, from our initial offering to the three most populated cities, to kingdom-wide coverage.

Technological innovations

In KSA, viewers can watch more than 1000 satellite TV channels for free. The IPTV offering should match or exceed the current level of quality and user perception. To achieve this, STC has introduced innovations in hybrid STB, fast channel change, parental control and end-to-end service assurance.

WinWin: From a technical perspective, how are you encouraging consumers to shift from free satellite

channels to IPTV? Harbi: We adopted an innovative hybrid STB

architecture. The hybrid STB architecture allows the customer to switch between IPTV and DVB-S with the press of a single button. In this way, customers have connectivity to IPTV and at the same time they can continue to view channels on satellite.

The reason we went for the hybrid STB was actually very simple. The competition for IPTV in Saudi Arabia primarily comes from the 1,000 plus available satellite TV channels. From our market research we came to the quick realization that it was definitely the case of quality rather than quantity. So at the first phase, IPTV was launched with 50 channels, which had very high standard of focus, breadth and quality. We were able to successfully utilize the quality bullet to shoot down the quantity challenge.

WinWin: We know that zapping time is a challenge for IPTV. How do you tackle this?

Harbi: The minimum time required to change IPTV channels is two-and-half seconds. If the Group of Pictures (GOP) is too long, the zapping time can take three to four seconds. This is the limitation of the technology. In comparison, satellite TV zapping time is only one to two seconds. IPTV zapping time should be better, or at least match the current satellite TV zapping performance.

To achieve this, we have employed a fast channel change (FCC) solution. The beauty of the solution is that the FCC server caches all IPTV channels and sends the GOP at a higher bit rate, which enables us to reduce the zapping time to less than one second.

WinWin: KSA is a deeply religious country, being home to the two holiest places in Islam. What mechanism is in place to ensure the contents are suitable for viewing by the local population?

Harbi: KSA is the birthplace and center of the Islamic

In KSA, viewers can watch more than 1000 satellite TV channels for free. The IPTV offering should match or exceed the current level of quality and user

perception. To achieve this, STC has introduced numerous innovations.

VOICEFROM OPERATORS

9

Win-Win / FEB 2011

religion. It goes without saying that the IPTV offering should be in line with Islamic values. At the same time, KSA also has the largest number of expats in the Middle East. The needs of these two groups are very different. So the challenge for STC is to maintain the balance between conservative local residents and less conservative expats.

To overcome this challenge, we created a number of packages. We have packages which are for local residents. Also packages that are attractive to both groups and finally packages that we knew would be interesting to expats, like Hollywood and international films from India and the Philippines, etc.

To ensure that the content conformed to our culture and religion, Intigral our content arm carried out the censorship and editing of the content.

Then we gave personal control to the customer through the parental control feature as part of the IPTV solution, which enables the customer to take control of the TV content, classifying any movie/program in any channel according to the category he deems appropriate for himself and for his family. Customers can create and control their own profiles, and users log in by profile. For example, the father can create his own password-protected profile, and also create a separate profile for his children. In this case, the father can view all channels, while the kids are limited to only the children’s channels.

WinWin: Compared with traditional voice or Internet services, IPTV poses several operational challenges. How do you ensure service delivery quality?

Harbi: We implemented a very sophisticated and end-to-end service assurance solution, covering head end, IPTV platform, MPLS aggregation, Access and home network which are monitored at our 24×7 sophisticated

VNOC center. At the head end as well we have another dedicated 24/7 content monitoring NOC. To achieve the above we invested in placing video monitoring probes all across STC network. With the aforementioned end-to-end monitoring solution, we have been able to monitor even down to the customers RG and STB. At the end we have been able to monitor the service in our Single OSS solution, through which we can monitor all related IPTV KPIs such as packet loss and jitters. This gives us real-time analysis and so we can proactively fix problems, many times resolving issues even before they occur. The solution enables us to monitor all elements, identify the root problems, and avoid customer churn.

WinWin: Why did STC select Huawei as its partner for IPTV and how would you comment on the cooperation so far?

Harbi: Before we went for full deployment, we carried out trials with the three big vendors. Huawei really impressed us in the trial and we subsequently awarded Huawei the contract for IPTV in 2009. One of Huawei’s many strengths is the energy it has in developing, deploying services and its flexibility to adapt to changes in the customers’ expectations. The unique value we saw in Huawei, compared to other vendors, was the ability to understand customers’ challenges and difficulties, and to work around that and develop solutions. The constant pressure all operators face is to meet the time-to-market challenge. The short time Huawei spent on fixing problems really helped us when it came to time-to-market. Together, we and Huawei have developed a very visionary IPTV roadmap and we are aligned in our goals. I’m confident that we can provide the best services to meet all customers’ needs in the future.

Editor: Gao Xianrui sally@huawei.com

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Win-Win / FEB 2011

fter enduring more than a decade of conflict, Serbia, which gained independence in 2006, was hit in 2009 by the financial crisis that had ravaged most of Europe. As unemployment

soared and debt exploded, people had little money to spend. In short, it became a tricky business environment for companies in general, and Telenor Serbia was no exception.

But the business environment is not the only challenge that Telenor Serbia has been facing over the last few years. When it entered the market in the second half of 2006, it became the second mobile operator in the country, after taking over Mobi 63. The incumbent was (and remains) Telekom Serbia, which has commanded a larger market share and strong customer loyalty.

In early 2007, another player entered the market. This was Vip Mobile, a part of the Telekom Austria group, and it soon started making inroads into the market shares of the two existing operators. By March 2009, the operator had a 10% slice of the Serbian mobile market. “When a new operator starts from zero, it is bound to gain some market share,” says Telenor Serbia CEO Kjell-Morten Johnsen. “Obviously, losing subscribers is not satisfactory, but we are happy that we lost less than the incumbent did.”

Johnsen, who joined Telenor Serbia in March 2009, at about the time the crisis was hitting the country, knew he needed to act decisively to make sure no more ground was lost. But first he would have to deal with the company’s internal problems.

Cleaning house

Rising to the challengeTelenor Serbia

When Johnsen, an amiable, multi-lingual Norwegian with piercing eyes and a firm handshake, arrived in Serbia, he found the Telenor operation needing more than a spot of housecleaning. A number of Telenor Serbia’s management team left that year to join the group’s new venture in India, and Johnsen found the company caught off-guard. “Many of our procedures were exposed, especially when it came to retention,” he says. “We realized we were just not strong enough.” Realizing that he needed to tackle internal challenges before he could consider external ones, Johnsen spent his first few months recruiting a brand-new team and ensuring proper retention procedures, before finally launching what he calls a “new approach” in February 2010.

That approach comprised not just of investing heavily in Telenor’s postpaid business – a strategy Johnsen says is unavoidable – but also analyzing the market carefully to make sure the right messages were being delivered to the operator’s targeted market segments. “From that time onwards, we were sticking to our plans and setting the agenda ourselves,” he says. “And that is a very satisfying way to work.”

The results are showing – Telenor Serbia acquired 102,000 new subscribers in the third quarter of 2010, following a slight negative spell, and it also ranks first in the country in mobile broadband. And now Johnsen can look ahead to the not-insignificant work that lies ahead: growing the business in a market that is saturated in terms of subscriptions but low in ARPU; popularizing mobile broadband in a country that in general cannot afford high-end handsets; and getting Serbia ready for the coming LTE revolution that has started in the Nordic countries and will soon sweep across Europe.

A

Operating in a country ravaged first by wars and then by the economic crisis might seem like a challenging proposition on its own, but Telenor Serbia also has to deal with competition from both the majority-government-owned incumbent and a feisty new entrant. Unfazed by all this, though, is CEO Kjell-Morten Johnsen, who tells WinWin that he is confident his company, currently second in Serbia and first in mobile broadband, can strengthen its position while it prepares for the coming LTE revolution.

VOICEFROM OPERATORS

By Ranajit S. Dam

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Win-Win / FEB 201112

— Kjell-Morten Johnsen, CEO of Telenor Serbia

Serbia is a country that really needs to embrace the change that is coming in the form of new communication technologies. And we need to do our part to make it available to ensure it is a part of people’s lives to the fullest extent.

Win-Win / FEB 2011

A very different market What sets Serbia apart from most mobile markets in

Europe is its low mobile usage. “The usage is very low within our group,” says Johnsen. “And it’s also very low by European standards.” The reason behind this, he says, is the pricing structure in the fixed-line sector. Serbians find it very cheap to make long phone calls from home, and so tend not to use their mobile phones to make many calls. But that does not mean the penetration is low. “Penetration, at more than 100%, is roughly on the same level as Western countries, as is the level of competition,” he says. “But the first thing that jumps out to you when you look at the numbers is how low the usage is.”

Growth in the immediate future, according to Johnsen, will not necessarily come from Serbians buying new mobile phones and subscriptions, but will depend more on how well the operator is able to manage its own churn, benefit from the churn of other operators, and ensure customer loyalty by making sure they receive the messages it is sending across to them. One of the key messages is that Telenor is a brand that can be relied on, and to demonstrate this, the operator is offering a postpaid package called Prenesi that allows subscribers to carry over the unused minutes of one month to the next.

Another avenue for revenue growth is mobile Internet usage, but in this area, the operator faces an obstacle in the form of low purchasing power. “Central Europe in particular has been hit hard by the financial crisis, and Serbia anyway was a country in transition,” says Johnsen. “The amount of people willing to pay a premium for high-end handsets is very low.”

To tackle this challenge, Telenor Serbia is attempting to provide the smartphone experience on feature phones, which dominate the Serbian market. It recently introduced solutions with applications allowing communicator-style compression, such as Opera Mini and Telenor Communicator with email and chat options. As a result, feature phones can now operate in a way similar to high-end models, with the same transfer speed and a similar level of ease of use, but without the same heavy network load. The service, called Telenor Klik, is designed to encourage mobile users to browse the Internet through their phones. “So now it’s not just the innovators running around with their iPhones and other high-end handsets,” he says. “People with feature phones can access the Internet as well.”

With Telenor Klik, Telenor Serbia offers each subscriber 150MB of mobile data free until the end of the year. From next year, they will be able to use the service at affordable rates. “This service attempts to bridge the gap between lack of smartphone penetration, and giving people access,” Johnsen says. “Since this is mainly for people who don’t have 3G phone, 70% of the

offering goes through the GSM network. It is a challenge, but we have made preparations to handle the increase in traffic.”

Given how fast the mobile web is growing in Serbia, this seems to be a useful offering indeed. According to recent statistics released by Opera Software, Serbia is the top-ranking country in Europe in terms of both page-view growth (251% year-on-year) and user growth (165% year-over-year), with each mobile web user browsing 385 pages per month.

Telenor Serbia is also scouting around for vendors of low-cost smartphones as part of a drive to build a “handset portfolio that reflects the country’s purchasing power,” according to Johnsen.

All these are measures that should help Telenor Serbia increase revenue and boost market share in the medium term, but, for the forward-looking Johnsen, his eyes are firmly fixed on the future.

The next levelWith the Serbian economy expected to pick up soon,

purchasing power will also improve, leading to a demand for increasingly sophisticated mobile solutions. This in turn will cause a jump in data traffic, calling for a better-equipped network. “Serbia is a country that really needs to embrace the change that is coming in the form of new communication technologies,” says Johnsen. “We need to do our part to make it available to ensure it is a part of people’s lives to the fullest extent. And it is not Telenor alone that will do this; all operators will do this together with help from the government to ensure the progress of mobile communications.”

To make sure that its network is ready for the “next wave” of demand for pure bandwidth that is expected to happen as conditions improve, Telenor Serbia is working with Huawei on a massive renovation of its network. The plan is to get itself LTE-ready for the time that the wave hits.

The Serbian market is also heading for a shake-up soon, with the sale of the incumbent, Telekom Serbia on the horizon. The media has mentioned names of various European players, even Telekom Austria, owner of Serbia’s No. 3 mobile brand Vip Mobile. That, according to Johnsen, would be the industry’s “game-changer”, as it would make Serbia a two-player market again.

Not that this worries Johnsen, who is currently happy to sit back and calmly observe proceedings as they take shape. And nor is he unduly by worried the specter of number portability, scheduled to be allowed in Serbia sometime in 2011.

“We are ready,” he says.Editor: Gao Xianrui sally@huawei.com

VOICEFROM OPERATORS

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Win-Win / FEB 2011

Three years ago, Mobily, the Saudi Arabian operator that ran the world’s busiest mobile broadband network, decided to go in for managed services in order to sustain its business growth. We met with Ashraf Ismail Mohamed Ibrahim, Mobily’s Vice President of Managed Service, who talks about how the company tackled the managed service challenges previously, and its strategy for the future.

The world’s busiest mobile broadband network

WinWin: We know that Mobily has been very innovative, and achieved many firsts in the mobile broadband area. Can you give us some examples?

Ashraf: Mobily is the leader and pioneer in mobile broadband services and applications in the Middle East. We launched our high-usage mobile bundles and broadband Internet bundles on 19 May 2007. In December 2009, just two-and-a-half years after the commercial launch, we recorded one million mobile broadband subscribers.

This exponential mobile broadband growth has been in line with our expectations, and because of our foresight and planning, we were able to capitalize on this demand. As a subsidiary of the Etisalat Group, Mobily has always adopted the most advanced technology to deliver a superb user experience. We successfully completed trials for the coming upgrade of our state-of-the-art HSPA+ network, testing speeds of 42Mbps. The 42Mbps speed, expected to be rolled out in major cities soon, will be the first major speed upgrade since we became the first operator in the region to launch HSPA+ towards the end of 2009, with speeds of 21Mbps.

In our recently announced five-year plan, we have increased our focus on data and broadband customers. I’m very confident that our mobile data business growth will continue unabated in future.

WinWin: The GSM Association, the world’s GSM promoter, declared that Mobily’s network was the busiest in the world in terms of data traffic. Can you give us some figures?

Mobily: Managed services in the mobile broadband era

By Julia Yao

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Ashraf Ismail Mohamed Ibrahim

Win-Win / FEB 2011

Three years ago, the GSMA said our network was the world’s busiest in terms of data traffic. Since December 2007, our data traffic has grown tenfold,

reaching 50TB daily in December 2009, and 72TB today.

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VOICEFROM OPERATORS

Ashraf: Three years ago at the GSMA Congress, we found that the biggest mobile operators in Europe were talking about data traffic of 16TB or 17TB per day as a breakthrough. At that time, our daily traffic volume had already reached 22TB. So it was not surprising that the GSM Association said our network was the busiest in the world in terms of data traffic. Indeed, since December 2007, our data traffic has grown tenfold, reaching 50TB daily in December 2009. Astonishingly we see 72TB of data traffic daily today.

This is a huge number. Frankly speaking, if we didn’t have the right strategic plan, network infrastructure or the right O&M team, it would not have been achieved.

Managed service, the right strategic decision

WinWin: Operating and maintaining the world’s busiest mobile data network must be challenging. What are the main challenges you have faced and how have you dealt with them?

Ashraf: When it comes to O&M, a well-established network requires a number of factors. You need to put adequate O&M procedures in place, plus have the right resources and skillful staff capable of O&M and monitoring such technology.

Since we have the busiest network, we also have huge O&M challenges, for instance, complicated multi-vendor network maintenance and surveillance, shortage of All-IP based technical skills, multiple vendor support interfaces, and internal and external coordination back and forth with increasing OPEX.

So three years ago, we asked ourselves: How can we sustain our future growth? The decision was made to choose the right managed service partner with the right operational model that would sustain the success. Following this decision, in March 2008, we signed a three-

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year outsourcing deal with Huawei, Alcatel-Lucent and Ericsson, under which the vendors would manage, operate and maintain our mobile networks.

Choosing the managed service partner three years ago was a very strategic move, and it enabled us to have sustained business growth, including but not limited to mobile broadband.

WinWin: What is Huawei’s managed service scope and how well has it delivered?

Ashraf: Under the managed service agreement, Huawei was responsible for network operation, back office, field operation, network optimization, and spare parts management. Additionally, Huawei would maintain multi-vendor telecom equipment and act on behalf of Mobily to manage multi-vendor spare parts and third level support.

I think the challenge here was the multi-vendor service environment. In my opinion, this is actually the hottest topic in the managed service field, and the whole industry is evolving around how the managed service provider is able to manage a multi-vendor environment. It is not about managing the one product; it’s about taking care of the network end to end, and managing all products.

I think Huawei has tackled the challenges well. In addition to an iNOC system to simplify the overall O&M management, Huawei also delivered a standardized managed service operation flow. Through the last one-and-a-half years of operation, Mobily has witnessed sustained network performance and stability, and increased network KPIs, apart from reducing OPEX by up to 20%.

WinWin: How do you expect the managed services to evolve, and what are your priorities in this regard?

Ashraf: First, the evaluation criteria for managed services should go beyond network indicators, and really focus on quality indicators. We are gradually taking our hands off the network operations. But even so, to have the proper control, we are asking our managed service

We are asking our managed service partners to provide us more than KPIs. What is more important, is how our end-users perceive our services. We are asking for quality assurance by which I can have full visibility of the network end to end.

Editor: Gao Xianrui sally@huawei.com

partners to provide us more than KPIs, as it’s taken for granted that technical performance indicators in the network are definitely achieved with the right platform, the right people and the right resources. What is left, and more important, is how our end-users perceive our services. We are asking for end-to-end quality assurance by which I can have full visibility of the network end to end. This is the Service Quality Management (SQM) model currently being presented as the state-of-the-art solution for all headaches related to managing different areas of the network. That’s why, in our forthcoming five-year managed service contract that will kick off soon, 80% of our performance indicators are pure quality indicators.

Second, the multi-vendor environment. How can we achieve a healthy cooperation between the different vendors to bridge the potential gaps and have an end-to-end seamless view? How can we develop standard processes to cover a multi-vendor environment? These are the areas that we are actively studying.

WinWin: In your opinion, what role will Huawei play in managed services in future?

Ashraf: To describe managed services in a single sentence: It’s a journey between the service provider and the technology provider. It has to be a partnership with a sufficient level of trust. We are proud of our partnership with Huawei, and Huawei is really contributing to our success. Huawei is our major network provider for packet core, IP MPLS and transmission network. When it comes to managed services, Huawei has shown its competence and commitment. Still, I would say managed services have huge potential, and Huawei should make it a strategic plan. When it does, it will start evolving the whole managed service industry with state-of-the-art concepts including global reference, Center Of Excellence and pooling of resources. So when the opportunities come, Huawei will be ready before the others.

Win-Win / FEB 2011

By Michael Huang

Tao of Business

Operating in 32 markets around the world, Caribbean-headquartered mobile operator Digicel is responding actively to customers’ demands for more functionalities on their terminals. WinWin met with Thomas Bryant, Vice President of Global Operations at Digicel, to discover the operator’s mobile device strategy.

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Digicel: Adding more value to mobile devices

ince i t s l aunch in 2001, Dig ice l has seen remarkable growth in its wireless communications business in the Caribbean. Renowned for its competitive rates, unbeatable coverage and a wide

variety of products and services, Digicel is also highly praised for its state-of-the-art handsets and terminals.

At the end of August 2010, Digicel announced that it had surpassed the 11-million-customer mark across its 32 markets worldwide. But choosing effective handset strategies to meet the needs of customers requires a lot of effort, as “each country has a unique client base and occasionally different needs and interests,” says Bryant.

“Yet there are a lot of commonalities and similar needs for services and features. Throughout the nine years that we have been operating, the company has always endeavored to provide our customers with reliable service, attractive rate plans and superior handsets from quality manufacturers that ship on time and are priced competitively. These principles have demonstrated Digicel’s commitment to best-in-class terminals that will successfully satisfy the diverse needs of our 11+ million customers around the world,” he adds.

Coral, a proven success

In 2007, Digicel launched its own brand of handsets cal led Coral , which was inspired by the tropical environment, music and vibrancy of the Caribbean. Introduced in all of Digicel’s markets, the Coral handsets have been among the best value for money choices, helping Digicel provide affordable mobile phones for all, while enhancing mobile penetration throughout its markets around the world.

When Digicel first considered entering the Haitian market, some statistics suggested that many people might not be able to afford mobile phones. But the company followed through and undertook the largest capital investment in the history of Haiti by introducing a superior network and offering attractive products at fair and reasonable prices.

In 2007, when Digicel entered the South Pacific country of Papua New Guinea, the average annual income of the country’s population was approximately USD1,000. And with many Papuans being nomadic and spread throughout the countryside, much of the available census data was incomplete. So, Digicel deployed helicopters to fly across the country assessing the population, not once, but twice to ensure the accuracy of the data. Then, using the assembled information, Digicel built a network of 600 towers and then introduced handsets costing approximately USD19 each, along with other unique services and discounts to win over customers.

Bryant says that in spite of the low cost, the handsets are quality devices incorporating desirable features along with attractive designs. “The Coral handsets have been accepted as widely as any device from a Tier-1 vendor,” he adds with pride. “They are often thinner, lighter and more appealing and are frequently available in more dynamic colors with larger screens along with other customer-oriented features.”

Moreover, Digicel has insisted that the makers of the Coral handsets utilize high-gloss finishes and materials to ensure the phones have a similar look and feel to handsets offered in higher price ranges. All these elements have added to “the successful acceptance of the Coral brand throughout our markets, and helped to provide our customers with an outstanding user experience,” he says.

Over the last few years, an unexpected consequence of

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We are convinced and the facts demonstrate that our customers can more effectively utilize and enhance the value of their mobile phone experience when

leading-edge, customized services are offered to them.

Digicel’s in-house brand success has resulted in “customers from other mobile networks visiting our competitor’s stores asking to buy a Coral phone”. So, with more than seven million Coral branded phones produced and distributed since the launch of the initiative, it can be fairly said that, Digicel’s Coral strategy has been a remarkable success. “Thanks to our partnership and strong cooperation with leading manufacturers, we have been able to offer these innovative phones to millions of our customers throughout the world,” Bryant adds.

Going beyond handsets

Though Digicel’s handset strategy has been successful, Bryant thinks that more can be done to serve customers and enrich their lives through a wide variety of services that go beyond handsets, and this spirit is in large part why Digicel’s efforts and achievements have resulted in it being named “Best Operator in a Developing Market” at the recent World Communications Awards 2010.

Digicel’s innovative and customer-centered solutions include providing international visitors to the Turks and Caicos Islands, home to the amazing Grace Bay Beach, with a unique service at a leading oceanfront resort.

Here’s how the program works. Upon arrival at the resort, guests receive a Digicel phone and charger when they are presented with their room-key. The resort’s logo is used as the wallpaper and all the phones are part of a specific user group. So, calls to guest rooms or the front desk are free, plus visitors can take the phones with them as they tour the island, thus never missing important calls from friends and family back home. Aside from the outstanding customer convenience, the resort saved the cost of having to install and maintain an expensive traditional PBX system.

“We are convinced, and the facts demonstrate that our customers can more effectively utilize and enhance the value of their mobile phone experience when leading-edge, customized services are offered to them,” says Bryant. And he adds, “Digicel’s networks haven’t just changed lives and commerce, but they’ve frequently saved lives across our various markets around the globe.”

This was especially true in the case of Haiti following the tragic January 12, 2010 earthquake that devastated that proud country. Digicel acted quickly to offer strategic and effective assistance through a series of wide-ranging relief efforts. They ensured that as many customers as possible could stay connected to friends and family and to facilitate that goal, Digicel offered millions of dollars in free calling cards and replacement SIMs along with gifting tens of thousands of new handsets (some of them solar-powered models) to the affected population, whether they were previous Digicel customers or not.

A principle task in the days immediately following the quake was to reopen as many stores as possible so as to help people charge their phones and to distribute phone vouchers along with other basic necessities such as water and other personal items. The company was notably congratulated and recognized by the US State Department and Secretary of State Hillary Clinton, as well as by former President Bill Clinton, who has served as the UN Special Envoy to Haiti since 2009.

Additionally, as part of the effort to help people fight the recent cholera outbreak in central Haiti, Digicel set up a dedicated customer care centre providing free SMS services through which customers received life-saving information and updates on the dangerous situation. Also, Digicel was very effective in coordinating efforts to distribute vital supplies of food and water purification tablets to the affected areas of the country. “It has always been our commitment to use the network for good and in

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this case to help our customers take preventative measures to protect their families and friends, which is just another example of Digicel’s dedication to changing and saving lives,” says Bryant.

Meanwhile, in all their markets, “Digicel is offering GPRS capabilities even on our least expensive Coral models. We want our customers to enjoy an experience that extends beyond pure voice calls and with the launch of Digicel LIVE, people can download ringtones, wall papers and gaming even over the most basic devices we offer. We are also actively moving into mhealth (mobile health), another objective that will be more successful but utilizing GPRS, so we’re happy to have already seeded the marketplace with handsets capable of displaying helpful information and icons to the various communities where we’ll roll out these information services in 2011,” he says.

In September 2010, Digicel announced plans to actively enter the mobile money space, which is expected to dramatically improve people’s lives with even greater success than the early mobile banking deployments in Africa and Asia. The plans that Digicel will be offering to the public will help provide the basis for sustainable methods of commerce and financial interchange in markets throughout the Caribbean, Latin American and the South Pacific and Bryant is looking forward to even more unique and first-to-market initiatives in the near future.

Preparing for the next stageDigicel’s next priority will be to further expand 3G

throughout more of their markets. “We currently offer 3G services in Bermuda and the French West Indies and in

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???reach is deploying fiber optic technology into the U.K.’s access network in two ways: FTTP, which provides a pure fiber infrastructure

capable of 100Mbps download speeds and very high upload speeds – 15Mbps

2011 we’ll have additional deployments of this technology throughout many more of our large and medium-size markets. Digicel is convinced that 3G will provide even more capabilities to our customer base,” says Bryant.

To better support 3G development, Digicel is planning to expand its terminal portfolio and in particular will greatly expand their line-up of Android handsets throughout all their markets.

“Offering a wide assortment of Android devices in 2011 and beyond will become a core new element in the services, innovation and choice that we’ll be providing our customers. We believe that this will be a complementary advance to those that we currently offer our customers today,” says Bryant. “Our strong push into Android and other leading operating systems is part of our fundamental belief that these new technologies will help us create a new and even wider client base. Moreover, Digicel will be actively supporting a wide selection of the finest tablets, data cards and dongles in the Caribbean market.”

According to Bryant, a successful device strategy can’t happen without the support of outstandingly reliable partners. “Companies like Huawei and others are helping us to source superb handsets at fair and reasonable prices while incorporating the latest customer desired features such as FM radios, higher resolution cameras, GPRS functionality and larger screens, which help to better improve the overall Digicel user experience. Additionally, Huawei has been an effective and reliable provider of network equipment to Digicel over the last several years and we look forward to a very robust and expanding relationship into the future,” he adds.

Editor: Gao Xianrui sally@huawei.com

Win-Win / FEB 2011

Vodafone SpainProviding real value to SMEs By Joyce Fan

Small but importantWinWin: How important are SMEs to Vodafone

Spain’s enterprise business?Rivas: SMEs form the largest segment of our Spanish

enterprise market. In Spain, there are only about 28,000 companies with more than 50 employees. Of our enterprise customers, 98% have less than 50 employees.

Of course, one could say that it is not the number of companies that matters, but the number of total employees, since larger corporations may have ten or hundred times the number of employees than SMEs do. However, in our case employees of large companies account for less than 25% of the total. This is why we have developed a lot of platforms to address the SME segment.

WinWin: According to what you have observed, what unique characteristics and needs do SMEs have today?

Rivas: In terms of communications service penetration, Spanish SMEs today are quite mature. They have a mobile

“From the marketing perspective of CMOs, the most appealing market for their enterprise business is large companies. The SME market does not hold much glamour for them, but in Spain, for us, it does,” says Cristina Rivas, Vodafone Spain’s Marketing Director of Enterprise Business Unit, who talks about why and how the operator is making this segment a priority.

Tao of Business

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Cristina Rivas

Win-Win / FEB 2011

voice penetration rate of 95%. More than 90% of SMEs have fixed broadband access, and half of them have mobile broadband access.

However, when talking about applications and IT capabilities, SMEs tend to lag behind their larger counterparts. Only 30% of companies with less than 50 employees have invested in applications. Many of them use ERP, but that is the only application they use. When it comes to vertical applications, only 1% of them use it.

SMEs are too small to spend a lump sum on application development and system integration; they are too small to have dedicated people for technology management, evolution and maintenance; and they find it difficult and expensive to find technology providers, since the smaller the company is, the more difficult it is to justify the cost per employee.

So their needs are quite clear: They need telecom services similar to what the large corporates use to improve productivity, but they cannot afford the same model and price. They want the same thing in a different way.

Corporate-level service in an affordable way

WinWin: What is Vodafone’s strategy to meet the SMEs’ unique needs?

Rivas: Our strategy leverages a number of technology trends. These include mobility and “always on” data. And then there are unified communications and cloud services. All of these have been accelerated by increasing broadband usage, IP networks, and new devices. Based on these new technologies, we can provide SMEs improved productivity and lowered costs. To this end, we have formulated three key propositions to fit customer needs.

First is building services on the cloud. SMEs can enjoy plug-and-play services and a charging model of pay by service. No investment or maintenance is required, so SMEs can afford it. From Vodafone’s perspective, it is a very nice scenario for our efficient selling and operation.

Second is leveraging our core competence: mobile voice and data. SMEs are keen on mobility. SMEs are more “mobile” than any other segment in the Spanish market. They feel comfortable with smartphones and so on.

Third is providing SMEs the same access to services that we provide to large corporations, which gives them a competitive advantage. By doing so, we can realize economies of scale and sell services to other segments.

WinWin: What are some of the successful brands you have launched to target SMEs?

Rivas: In terms of voice, we launched our first cloud-based service, Oficina Vodafone, in 2006. It is a real fixed

and mobile convergent solution based on FMS and IMS networks.

We provide fixed and mobile voice services with a unified user interface to employees of SMEs, regardless of the terminal they are using – PC, laptop, mobile or fixed phones. Also, because it utilizes our IMS network, application interfaces can be opened to SMEs so that we can add PBX functionalities like manager/assistance, parking and so on. All of these use the same VPN. It is truly a unified experience.

Us ing Of ic ina Vodafone , an SME can reduce communication expenditure by 20 or 30%. It has been really successful in the market, and we have more than 30,000 customers using it.

WinWin: Aside from voice, Vodafone Spain has also entered the business applications field with Vodafone Business Place in 2009. What value does this solution bring to SMEs?

Rivas: Once we had tackled the issue of voice, we wanted to take the step up to the next level. Together with Huawei, we have developed a platform called Vodafone Business Place. Again, it provides SMEs corporate-level access to IT applications and mobility applications by leveraging cloud technology.

It is a marketplace, an app store that develops business and productivity applications for SMEs. Currently, more than 50 partners provide business applications. Other than that, Vodafone Business Place provides value in the following ways:

First, we have created an Intranet of mobile applications on which SMEs can set up a “private” area. A company’s decision maker won’t want to let his employees to spend his money and buy whatever they want. Here we allow SMEs to decide what applications their employees can access.

Second, it is a channel for SMEs’ customers. Customers are also looking to get applications from SMEs. So Vodafone Business Place helps to extend the business model, from B2B to B2B2C.

Finally, we have adopted Huawei ecoSpace platform to create a development environment and offer easy access to our business customers, partners, and developers. Using this, functionalities like app store, developer evaluation, content managing, IT capability, and everything else you need, can be built easily.

With all of this, we can now promise the best experience for SMEs. Many of our new offerings have resulted from our focus on innovation. We cooperated with Huawei on an innovation lab in Madrid in 2008. With Huawei, we introduced a lot of ideas and took them to market easily. And this was not only the Vodafone Business Place, but also devices and a lot of applications.

Editor: Gao Xianrui sally@huawei.com

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Huawei’s Single StrategyMaximizing Operator Asset Values

By Wang Tao, President of Wireless Network, Huawei

he universally well stated and acknowledged opportunities of mobile broadband (MBB) ineluctably compel operators to escalate investments in strategy and planning. A

majority of this accelerated fiscal demand is simply to keep pace with the projected growth of subscribers and their expectation. Long before a return on any MBB investment can be considered, a parallel concern therefore becomes one of maintaining profitability. This concern is compounded by two simple facts:• Lower ARPU represented in large part by the numbers

of newly added and future new subscribers worldwide. • Higher bandwidth requirements to meet the predicted

500 times increase in traffic mandate expansion of bandwidth service to meet demand. Unless addressed comprehensively from the outset,

the challenges of lower profits and debatable future ROI becomes may defeat even the most alluring opportunities presented by MBB.

To sustain operators’ profitability Huawei believes the first step in ensuring cost effective development of any MBB network must be to secure and improve the efficiencies of key related assets: Sites, Spectrum, Pipelines, Subscribers and Staff. Building on Huawei’s converged network solution SingleRAN (introduced in 2009), 2011 sees the introduction of our end-to-end Single Strategy, an optimal combination of ways to increase the efficiencies and maximize the values of operator assets across the board.

Sites: Making several million sites closer, greener, and broader

As people become more concerned about private property rights and environmental protection, sites

T

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Wang Tao

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are increasingly difficult to acquire. In many parts of the world, the cost of renting sites is far higher than purchasing network equipment. Operators are therefore reluctant to construct new sites, but they must still enhance and expand network coverage. They also want to retain their existing sites by simplifying deployment and maintenance to reduce disturbance caused to property owners. This has also posed new requirements for mobile networks.

Huawei’s Single Strategy aims at making the sites “Closer, Greener, and Broader”. “Closer” means to use Femto/Pico as a supplement to mobile networks, which can be deployed in close proximity to subscribers and can give them easy access to applications. “Greener” means to reduce site cost from end-to-end, including site rental, acquirement and operation; yearly power consumption of sites through technological improvements; and using technology such as IP microwave backhaul to enable wireless backhaul which significantly reduces construction costs.

As data traffic surges, one site may face significant traffic increase. Huawei’s Single Strategy enables the deployment of a maximum of five bands and three modes in one cabinet. This approach eliminates the need to construct new sites or to expand space, and increased traffic can be easily managed. This is what we mean by “Broader”.

Spectrum: Broadband frequency reuse

Scarcity of spectrum resources means that operators with the most spectrums will ultimately gain the upper hand. Since the cost to acquire these resources is extremely high, there has been considerable discussion about ways to effectively utilize spectrum assets over recent years. The

conclusions are simple. If the same spectrum can be used differently by varied mobile technologies, or if existing spectrum can be reused, operators will continue to enjoy greater returns and the spectrum assets will appreciate in value.

Huawei’s Single Strategy increases the efficiencies of spectrum assets in the following ways:• Multiple-Input Multiple-Output (MIMO) technology

can be used to increase the efficiencies of a single spectrum. For example, Huawei has achieved 8T8R in Time Division Duplex (TDD) and 4T4R in Frequency Division Duplex (FDD). Most of Huawei’s base station products are optimized to support MIMO, which single module can support two transceivers.

• Huawei’s SingleRAN solution also enables the deployment of GSM/UMTS, UMTS/LTE and GSM/LTE in the same band class. Huawei’s advanced multi-frequency and multi-mode Software Defined Radio (SDR) can be used to increase the efficiencies of multiple spectrums. In the future, portfolios of multiple technologies and multiple bands will be made available.

Subscribers: Taking five billion subscribers forward

Subscribers are operators’ most valuable asset. As mobile networks rapidly evolve, maintaining subscriber loyalty has become the biggest challenge that operators face when upgrading their network. So smooth network evolution and improved user satisfaction is of the most important issues that operators must address. Although data services are developing rapidly, voice users also have a significant presence. Operators must not forget that voice is still a core service. That is why Huawei continues to enhance voice service, delivering crystal clear voice quality. We

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To sustain operators’ profitability Huawei believes the first step in ensuring cost effective development of any MBB network is to secure and improve the efficiencies

of key related assets such as: sites, spectrum, pipelines, subscribers and staff.

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m u s t e n s u r e t h a t , a s subscribers move into an era of rich communications with converged development of data and voice services, as well as GSM/UMTS networks, user satisfaction and user loyalty must not be overlooked. This will also be true as we migrate to Long Term Evolution (LTE), where high-quality seamless connection will become a reality. Huawei’s Single Strategy takes care of subscribers, quickly responds to complaints, accurately locates the problems using historical records, and improves the experience of subscribers.

Pipelines: 3D single All-IP pipe

Improving internal connections among mobile network elements, All-IP pipelines (backhaul and backbone) inevitably become vital assets of MBB and represent the largest infrastructure investment. Huawei’s Single Strategy maximizes pipelines in 3 different dimensions: Converging, Flattening and Evolving – Huawei’s 3D Single All-IP Pipe.

In the access layer, IP microwave seamlessly enables evolution. With the surge of All-IP in MBB, data services will increase tremendously and GSM TDM services will

continue for some time. IP microwave solutions can also ensure smooth transition from TDM or Hybrid to Pure Packet.

In the aggregation layer, with an industrial 1st 300mm-depth mini EDGE router installed in the outdoor cabinet, Huawei is able to help operators to deploy the end-to-end router-based IP backhaul network from BSC/RNC/AGW to BTS/Node B/eNode B. The router-based IP backhaul is able to provide “Any Connection” to UMTS/HSPA/LTE network with flexible choices in pure static routing, hybrid routing and pure dynamic routing. This minimizes IP backhaul investment and maximizes the evolution of All-IP pipeline.

In the core layer, the IP & OTN synergy acts as a backbone solution, making the network more reliable and efficient. The IP layer recognizes services and processes packet services automatically and efficiently. The optical layer provides endless bandwidth and transports mass data over thousands of kilometres.

STAFF: Optimizing labour resources

A huge workforce is important to operators, but this often means massive investment in human resources, which puts great pressure on operators. To maximize the value of their workforce, operators hope to avoid a sharp increase in workforce while enhancing network performance and expanding network capacity. Under Huawei’s Single Strategy, converged management is introduced for equipment and site solutions for different technological systems, as well as for the entire network. In this scenario, Operation and Maintenance (O&M) personnel do not need to receive complicated training. Instead, they can be quickly trained to perform complex end-to-end network maintenance jobs. This way, they can move away from becoming equipment O&M personnel to O&M personnel who focus on user experiences. Huawei’s Single Strategy greatly lowers the OPEX and increases CAPEX efficiencies. With the help of convergent management and joint operation of GSM/UMTS/LTE networks, operators can confidently overcome the MBB challenges.

In conclusion, Huawei’s end-to-end Single Strategy has been designed to help operators increase their asset efficiencies in five aspects: site assets, spectrum assets, pipeline assets, subscriber assets, and staff assets. It is an ideal solution for effectively meeting the growing requirements of operators.

Editor: Ranajit S. Dam ranajit.dam@huawei.com

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Three mobile broadband myths busted

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s part of a Current A n a l y s i s r e s e a r c h p r o j e c t , w e a r e current ly t rack ing

more than 1 ,000 con sumer services provided by more than 62 network operators in 17 European markets. We track every single service on a quarterly basis, both consumer and small business. Fundamentally, we are looking for new market trends, innovation and best practices.

Research data has shown that many of the myths related to mobile broadband in Europe amount to noth ing but ju s t wishful thinking at this point. He re a r e t h r e e o f t h e m o re significant myths that our research has busted.

The all-you-can-eat data buffet is still on

The first myth is that unlimited data packages are on the way out, and operators are either moving away from marketing mobile broadband services as unlimited, or dropping unlimited data altogether. According to our research, however, the reality is the opposite, and operators

Do we really understand the mobile broadband business? How correct are the generally held beliefs in the industry that unlimited data packages are on the way out? Is the mobile broadband land-grab over,

and has pricing stabilized? And finally, are we ready for QoS? According to Emma Mohr-McClune at Current Analysis, this is all wishful thinking. She dispels three prevailing mobile broadband myths for us.

By Emma Mohr-McClune

are actually embracing unlimited data services more wholeheartedly. Research shows that the all-you-can-eat data buffet is yet to close. As usage grows, networks will redefine the term “unlimited” and introduce new tariffs for the heaviest users.

Unlimited mobile broadband services on the rise

U n l i m i t e d d a t a d o e s n’t necessarily mean there is no fair usage policy at all, but that is how the operators are positioning it in the market. In Western Europe, unlimited data could mean just about anything, from 50MB to 40GB, and we see everything in between. But these are not really unlimited services. In 87% of

the cases of services marketed as “unlimited”, operators either apply bandwidth reduction beyond a defined usage cap or impose excess usage charges. Interestingly, the penetration of unlimited services are most prevalent in Europe’s most mature and progressive mobile broadband markets: Portugal, Austria, France, Switzerland, Sweden and Germany. These are not emerging markets for broadband.

In the third quarter of 2009, we saw 80 products in the market that were described as unlimited. The penetration of these services tends to cluster in the mature markets.

Perspective

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stabilized, and that the price war danger we first identified in 2008 had been neutralized. Additionally, with the market maturing, people believe the concept of super aggressive pricing has disappeared, and postpaid pricing is at a very stable level. In fact, this is not the case.

Postpaid pricing benchmarks fall in Q2

In the second quarter of 2010, we saw a dangerous and most radical price dip in postpaid entry-level plans, which we were not expecting. This was triggered by promotions happening in the prepaid market, but also cutthroat pricing policies pushed through operators’ secondary brands, targeting the value segment with distinct marketing and branding strategies. The secondary brand effectively allows operators to play aggressively in the market whilst protecting their core, “quality” flagship brand. If we only consider pricing within the primary channel, pricing does indeed appear to be relatively stable. But if we look across the continent at the aggregate operator channel, there is still a lot of downward pressure.

A new, “no-contract” proposition

The biggest trend in mobile broadband is a new, “no-contract” proposition, also referred to as a 30-day rolling contract. A 30-day contract is defined as a hybrid postpaid/prepaid model, through which users commit to a monthly spend, but may churn within a two-week notice period. Interestingly, penetration of the 30-day contract has grown significantly throughout Europe, thanks primarily to the iPad and other tablets. The markets and products with this proposition were up from 2 and 5 in the last quarter of 2009, to 8 and 44 in the second quarter of 2010 respectively. In the third quarter of 2010, just over half of all 30-day contract plans in Europe were aligned specifically with iPad or tablet offers. This, without doubt,

For example in Switzerland, most services are described as “unlimited”. In the second quarter of 2010, we saw the total number of unlimited services across the 17 markets increase by 62%. And in the third quarter of 2010, we expect to see more. Far from being dead, the practice of marketing mobile broadband services as “unlimited” is on the increase in Europe.

More operators marketing unlimited services

More operators, instead of backing away from the concept, are actually moving toward unlimited data plans, and featuring them more frequently in their portfolios. In the third quarter of 2009, there were about 20 operators marketing unlimited propositions. By the first half year of 2010, the number of operators in that sector had increased by about a third.

The Swedish market is particularly interesting. About a year ago, the top three operators decided to move away from “unlimited” marketing and turned to tiered data pricing for mobile broadband. That should have been the end of unlimited data in Sweden. Many of us in the analyst community applauded that move. We saw Sweden as demonstrating leadership on this issue, and we referred to this move as a demonstration of best practice for operators in other markets. But problematically, one very aggressive Swedish operator dug in its heels and made a unique selling point of “unlimited”, effectively, forcing its competitors to return – reluctantly – to unlimited data marketing within a year.

It’s not 2008 anymore, but the price war is not over

The second myth we explored was that the market had

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The biggest trend in mobile broadband is a 30-day rolling contract. Interestingly, penetration of the contract has grown significantly throughout Europe,

thanks primarily to the iPad and other tablets.

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We recommend operators move from network-centric to customer-centric marketing, restrict the 30-day plan to entry level, use unlimited data marketing

judiciously and seek leadership in the small business market.

is the fastest growing proposition in mobile broadband today, with grave implications for retention and loyalty in this segment.

We’re not ready for QoS

And the third myth is that the market is so mature, and that marketing has come so far that we are ready for LTE, and for differentiated experiences, treating users as individuals with different applications and different priority requirements. In short, the belief is that we are ready for QoS. In fact, this is not true. In the second quarter of 2010, we found that the vast majority of more than 1,000 services offered no prioritization on any level for either consumers or small businesses. What we did see was more intense marketing of “off-peak” data usage bonuses (e.g. “Happy Hour” periods, or unlimited access in the middle of the night etc.), but this is not the same thing as real QoS.

Treatment of applications

In Europe, most operators pose a blanket ban on undesirable applications, such as P2P, VoIP, IM and other applications related to peak-time usage. We see this ban as passive, and rather toothless – it is written into the service’s terms and conditions, but represents little more than a fair usage warning for users.

Services for small businesses woefully under-provisioned

Mobile broadband marketing has barely evolved over the last year. European operators are failing to provide small businesses with a differentiated proposition. This is a chronically under-provisioned market. Around 90%

of mobile broadband portfolios for small businesses are little more than consumer portfolio duplicates, with near or identical positioning and marketing messages. Small businesses are, in fact, groups of users, yet just 10% of European operators offer group tariffs, or bucket plans, for small businesses. There are currently no best-practice markets, although we have identified a handful of best-practice operators – 3 Austria, Orange Poland and o2 Germany.

What has got to happen?

Traditionally, mobile operators have always hyped the network, with coverage, speed and quality as the key marketing messages, using these assets to establish a unique selling point. Mobile broadband service marketing, to date, has tended towards network-centricity – it’s all about the network, and what the network can do for you. We need to move towards customer-centric marketing messages, focusing on what the user wants from our network; positioning which recognizes the distinct application requirements of different user segments.

At Current Analysis, we recommend operators make the move away from network-centric to customer-centric marketing, from single-speed marketing shouts to differentiated speeds, from hard ceilings, unlimited usage and fair usage policy to differentiated priorities according to time of day; and from the network as a key differentiator to differentiated application usage profiles and real-time notification.

Moreover, I would recommend we restrict the non-contract 30-day plan to the entry level, use unlimited data marketing judiciously and seek leadership in the small business market.

Editor: Zhu Wenli zhuwenli@huawei.com

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Online videothe pursuit of profitabilityFounded in February 2005, YouTube is the world’s biggest video sharing site, with the equivalent of 1,700 years of video uploaded so far, and two billion video views per day. However, despite recently becoming the world’s third-most visited Website, YouTube is estimated to turn a profit for the first time only this year, five years after commencing operations. This exemplifies the dilemma for video-sharing websites, which, while wildly popular, are still searching for that magic mantra that will bring them profitability, and soon.

By Fan Cunzhi & Yang Liqiang

The power of mass creativity

rom the very beginning, online video services have been rooted in the principle of open and free sharing on the Internet, allowing millions of people to produce and share videos. Viewing

videos on a personal computer requires only the free Adobe Flash Player plug-in, which is one of the most common pieces of software available. It covers 98% of desktops and accounts for more than 80% of online video materials. This greatly reduces the threshold for video usage and cost. With the rapid development of broadband, high-speed access to online videos has become much easier.

This means that users can find and enjoy the world’s premium video content whenever, wherever and however they want it via the open Internet. Almost all the TV shows and movies that have been publicly released can be found online, via free websites like YouTube, Youku (a Chinese service similar to YouTube) or Hulu. Even the popular public courses of Harvard can be accessed online, and are translated into multiple languages by interested Internet users.

But it is not just content created by large entities that are put online. Many of the online videos that are posted are

Perspective

Fcreated by amateur Internet users, and some of these become so popular that they are picked up by TV channels. User-generated content and traditional content are increasingly mixing with each other.

The number of videos created by users is beyond impressive. Take YouTube for example: Every minute, 24 hours of video is uploaded onto the site, which amounts to more than 1 million hours of video each month, far more than any TV channel produces during the same period. The power of mass creativity is undoubtedly the driving force behind online video services.

Brand-new user experience

Online video services take on mainstream TV networks not only in content, but also in terms of user experience. YouTube offers a selection of videos across PCs, TVs, mobile phones, Blu-ray players and gaming consoles that either have YouTube embedded, or otherwise support access. This extends even to non-mainstream boxes.

With Internet-enabled TV, people have fast and easy access to videos on the Web and enjoy all the basic functionalities that the computer experience provides, like reviewing, rating, sharing and rewinding and

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forwarding. Online video sites also provide various kinds of customization. YouTube, for example, offers a multi-view option for sports. Compared to the traditional way of viewing, viewers can lock onto their favorite player during a soccer game, and follow him throughout the duration of the contest. YouTube is also equipped with a speech-recognition capability that transcribes text spoken in the videos.

By offering a kind of user experience never witnessed before, online video services have acquired a very high level of recognition and loyalty among viewers from the very beginning. Be it high-definition or standard-definition, online videos stream smoothly, and viewers can find the content they want easily by searching. This has proved tremendously effective in drawing users away from traditional TV to the Internet.

The obstacles to profit

High costs

Online video services, even while having become a part of Internet users’ lives, have failed to be commercially successful. The majority of them are still operating at a loss, with the notable exception of Hulu. There are three major

factors behind this. The first is the cost of bandwidth and hardware, which accounts for almost 50% of the total cost. The second is the cost of copyright. This is especially true when Hulu’s model of acquiring copyrighted content is followed. The third is the cost of platform maintenance and promotion.

Thanks to their eye-catching nature, online video services require much less investment in advertising and are mainly dependent on word of mouth among viewers. So bandwidth cost stands out as the major expenditure.

Another area of expenditure is copyright. Most of the video sites encode the video stream in H.264 format, the license for which is owned by the firm MPEG LA. After a certain free period, the sites have to pay MPEG LA on the basis of number of users and duration of video playing. This makes it increasingly difficult for struggling video sites.

To address this issue, some sites were looking at P2P technology for a solution. On the one hand, P2P can help reduce bandwidth costs significantly. On the other hand, however, P2P is not embedded in the Flash plug-in, and viewers must download site-specific P2P client software, which makes the process inconvenient. On top of that, the large number of illegal P2P videos has dampened the enthusiasm of advertisers. Under these pressures, video sites have had to opt out of P2P, at least for the time being and

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Perspective

adopt it as a supplement at best.

Underwhelming revenues

Compared with the high costs and huge bandwidth consumption, commercial revenue delivered by video services is far from satisfactory. Hulu, as the only exception, is expected to report USD200 million of revenue for the year 2010; yet in stark contrast, traditional TV networks with the same content as Hulu can deliver 10 times higher revenue. Search behemoth Google rakes in more than USD20 billion in its keyword adverting alone for text and picture. Video sites, however, are unable to attract advertising revenue commensurate with their traffic volume.

Still, video-sharing sites have been doing their best to draw ad revenue. YouTube has a “20/80 rule”, by which an ad prompt appears in the lower part of the video screen, covering less than 20% of the area; if viewers don’t click within 10 seconds, the ad prompt disappears automatically. Some 80% of the ad prompts are transparent, and the ad will begin to play only when viewers click to show interest, with the video remaining paused until viewers click to close the ad. Besides, advertisers can also place eye-catching ads on YouTube to attract attention. Aside from this, YouTube has tried live broadcasting and pay-per-view to increase viewership, but so far these efforts have borne little fruit commercially.

Why Hulu stands outAccording to comScore, which tracked the major video

sites and ad networks in the month of July 2010, Hulu generated 783 million video ad impressions, snapping up the No.1 slot among all the video sites in the US. Despite drawing only 1% of all Internet video traffic, Hulu has acquired a staggering 33% share of the US video ad market. Hulu places ads wherever it can, and it does so at a rate

much higher than its closest competition. Hulu’s biggest advantage is the amount of time viewers

spend on the site, with the average user watching 21.1 videos or 2.1 hours. Hulu brings together a large selection of the current TV shows for free, which appeals more to viewers than the pay-view model does.

Hulu also has guarantees for high-quality video, as its selection of premium programming is provided by leading content companies, including NBC Universal, FOX and ABC, which also share an ownership stake in the company, in addition to News Corp. and the Walt Disney Company.

Hulu takes pride in its business model of free video, copyrighted content and efficient operation of ad business. In the North American market, where copyright is highly protected, free copyrighted content is a big magnet to viewers, which, combined with video’s high quality, give advertisers a free hand in ad placement. Although Hulu’s ad rates are 50% higher than its peers, it can generate increased value for advertisers, as the ad can be placed many times along with its videos. In comparison, at other video sites, video quality is often less than ideal and viewership is thus compromised. Hulu’s unique business model had proved to be a win-win model for both content providers and advertisers within a short time.

Yet, Hulu’s model is no easy model to follow. At the end of 2009, Chinese government started efforts to crack down on pirated content. Video sites in China were forced to change. And Hulu’s model came into focus. Starting in 2010, video sites in China began to invest heavily in acquiring copyrighted content. Youku for example, said it aimed to buy no less than 85% of the TV shows and movies available on the market, and has so far signed contract for 40,000 episodes of 1500 series, amounting to 1.6 million minutes of footage. Tudou plans to invest USD15 million. And Ku6 announced that it had acquired the exclusive rights to 70% of the hit episodes of 2010 with USD44 million. Given this sudden jump in demand, the cost of acquiring videos looks set to rise, up from the present RMB20,000 to

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Compared with the high costs and huge bandwidth consumption, commercial revenue delivered by video services is far from satisfactory. Video sites, for example,

are unable to attract advertising revenue commensurate with their traffic volume.

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RMB30,000 per episode to about RMB200,000, close to the price paid by traditional TV networks.

However, ad rates are yet to rise in a similar manner, being up by only 30% so far. Obviously, for video sites to copy the success of Hulu, multiple approaches have to be worked out to reduce costs, to avoid a price bubble and to increase the number of sources for high-quality video.

The future is still rosy

There is no doubt that online video services are the future. It is estimated that by 2014, video traffic will amount to 767 billion GB and take up 91% of the hours people spend online. With the advent of Google TV, more and more TV will be connected to the Web. By 2015, 473 million viewers will watch videos online via TV. There is huge room for growth of online video services to enrich people’s lives.

However, for onl ine video services to succeed commercially, there needs to be business innovations in several areas:

Increase ad value

Text ads alone make a huge difference for Google. Online video ads, with their richer user experience, are positioned to bring maximum value for advertisers, as long as the ad is closely connected with the video to ride the long tail, ensuring huge numbers of hits. And traditional ways of ad display, like banner ads, can no longer meet market demands. Online video sites, with advantage of rich media display based on video, can utilize their abundant video

resources in an interactive way to generate revenue.

Strengthen cooperation throughout value chain

With the popularity of high-definition and 3D TV, there will be a higher volume of video traffic over the Web. Robust infrastructure is a must for online video sites to carry the traffic through smoothly. Closer cooperation between online video sites and telecom operators, like revenue sharing, joint planning and resource allocation, could help sustain healthy traffic growth, lower bandwidth costs, improve video service quality and generate higher profits.

Content and service innovation

Online video sites should also try new business innovations like live broadcasting, in addition to the vodcasts they are currently doing. Though hurdles in the form of regulations and technology still exist, video sites can step further towards profitability if they innovate and become the top choices of viewers, as YouTube has.

Increased interaction

Currently, online video services don’t engage viewers in an interactive way, like giving users the ability to buy video-related products, and interaction among viewers. If they can relate closely with offline lives and add a local touch, the user experience will be better and video sites can achieve a higher amount of revenue. And then profitability would not be far away.

Editor: Li Xuefeng xuefengli@huawei.com

Winners

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TeliaSoneraFaster is betterWhen it comes to the deployment of LTE, the Nordic countries are definitely leading the world. Proclaiming “Faster is better”, Tommy Ljunggren, VP of System Development for TeliaSonera, could barely contain his optimism for the new technology during his speech at Global MBB Forum 2010.

By Tommy Ljunggren Editor: Long Ji longji@huawei.com

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First in the world with LTE

n December 2009, TeliaSonera commercially launched the world’s first LTE network in Oslo and Stockholm at the same time on the same day offering the same type of user

experience. About it, a question is often asked: “What is this commercial launch?” The answer can be found in the dongles commercially available in shops.

Currently, TeliaSonera has a few thousand LTE subscribers, and there has been no massive take-up yet because multimode terminals were not available until the second quarter of 2010. It has promised all of its customers that it would take the single-mode modems back and replace them with multimode modems. Now the promise has been kept, and a real take-up is taking place.

TeliaSonera has started extensive rollouts. In Sweden, it is offering LTE services in five cities, where customers can buy dongles in shops and subscribe to LTE services. It recently launched

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The average speeds on TeliaSonera’s LTE network are 40Mbps downlink and 35Mbps uplink. These are true average speeds, as TeliaSonera is not picking and choosing spots or anything like that for the measurement.

subscription packages, which allow subscribers to combine their LTE with different UMTS subscriptions and even with their fixed broadband at home. Before the end of 2010, 28 cities and recreation areas will have LTE. By the end of 2011, 228 cities will have LTE. This makes one wonder if there are 228 cities in Sweden. Actually, most of them are quite small.

TeliaSonera is at a heavy rollout stage in Norway, where all the major cities and some recreation areas will be LTE-ready by the end of 2010.

While soft-launching LTE in Finland, Denmark and Uzbekistan, TeliaSonera has run trial LTE connections in the Baltic countries, connecting to the Swedish and Norwegian networks.

So far as LTE is concerned, TeliaSonera has been alone in both Norway and Sweden, but it is not alone in the world. There have been delighting and encouraging developments in the U.S., which will continue to push the market further forward by bringing consumers in. LTE is also being embraced in other parts of the world like India.

Compared with the hassle of launching 2G and

— Tommy Ljunggren, VP of System Development for TeliaSonera

Winners

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UMTS previously, launching LTE was so easy that it turned out to be quite boring. By rolling out its LTE network, TeliaSonera is pushing the industry a bit. With the ease of launch and the many advantages of LTE, global operators should waste no time in launching LTE services themselves.

Outstanding LTE performanceAdvantages of LTE

The advantages of LTE are clear. The average speeds on TeliaSonera’s LTE network are 40Mbps downlink and 35Mbps uplink. These are true average speeds, as TeliaSonera is not picking and choosing spots or anything like that for the measurement; they remain the same whether in the Gothenburg area or the Stockholm area. As another key ingredient of LTE, low latency is also significant. The fast uplink speeds and the low latency are what drive new applications and new usage, which is best illustrated by the telecast of the recent royal wedding that was covered by the media in nearly real time.

The royal wedding

During the wedding of the Crown Princess of Sweden in June 2010, LTE mobile cameras were placed in the carriage of the bride and groom, together with laptops and LTE dongles when they

went through Stockholm. This was a brave decision made by the channel TV4 in an attempt to get good footage when the couple went through the city. They did, and they showed it live on TV.

While deploying a lot of outdoor broadcasting cars, TV4 used ten different mobile camera teams, equipped with laptops and LTE dongles and normal cameras. That was the only way they could cover the whole thing because, as soon as the wedding started, they could not move their buses – those big buses with satellite dishes and so on. But the mobile teams could go around in the city filming, and streamed live pictures to the TV center at a speed that was so good that they could use it as footage from the wedding. TV4 was the only channel to get the kiss outside the church as it was transmitted/telecast over LTE, so it was very happy.

Another benefit goes to press photographers. Previously, they had been using the wireless LAN for connection, as evidenced by the small device with the camera. During this royal wedding, 20 press photographers were stationed in the area, each with a laptop connected over LTE. They uploaded the pictures immediately to their websites and sold the pictures in seconds. That made a great difference for them and meant a lot of money – hundreds of thousands of dollars – earned by using LTE during the wedding.

This is one of the killer applications that people are looking for on LTE, and there will be more of them to come.

For TeliaSonera, as many as 70% of its sites can be reused, allowing for the addition of LTE capabilities to the existing UMTS network at no extra cost, especially in a SingleRAN environment.

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Dramatic growth of network traffic and usage

Mobile data traffic at least doubles every year in the Nordic countries. Why is this happening or why have we adopted LTE services so early? It is best answered by the fact that people are often tech-savvy in the Nordic countries. According to the Europe Digital Competitiveness Report by European Commission dated May 2010, Sweden, Norway, and Denmark rank among the top three countries in the percentage of population using mobile phones via UMTS to access the Internet and the percentage of population using laptops via wireless to access the Internet. TeliaSonera believes this is good business and a good place to be.

First let us talk about the sources of mobile data. As already shown by the GSMA, mobile broadband takes a large chunk of the traffic, though its number of users is smaller when compared with smartphones.

Actually a usage shift has been seen during the last month or so: more and more of usage coming from smartphones, with usage patterns different from laptop users. Meanwhile, machine-to-machine is starting to take off in a big way. This offers a massive opportunity for operators to earn revenues from and offer good solutions for corporate users. While serving private users, LTE can also deliver the quality that corporate users are looking for – this is the promise we have already seen delivered in the new technology.

Value-based pricing

In spite of all these usage patterns and statistics, can operators make money out of LTE? Yes, it is possible, but they have to be very careful about the business and pricing models they choose. As there’s no such thing as a free lunch, they have to have some kind of cap – a monthly fee and a defined speed. But they should be able to add things when they want to, including additional usage, additional speed, QoS, and fee for VoIP or for gaming. Future pricing should be something like “Lego blocks”, and operators need to use these add-on pricing models or see their business ruined.

While pricing models have to be carefully looked into, there is a fear that CAPEX and OPEX will skyrocket with this mobile broadband explosion. But this fear is unfounded, at least for TeliaSonera, given plummeting software costs and the degree to which network infrastructure could be reused. For TeliaSonera, as many as 70% of its sites can be reused, allowing for the addition of LTE capabilities to the existing UMTS network at no extra cost, especially in a SingleRAN environment.

LTE is not like HSPA that required costly hardware/software upgrades all the time. For LTE, the operator can get a lot for less if it upgrades its network at the same time, and can monetize this mobile broadband business if the right pricing model is chosen. LTE is promising and is really working.

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Telenor Norway

By Sigurd Thunem Editor: Michael huangzhuojian@huawei.com

Gearing up for LTETelenor Norway is currently upgrading its mobile network to get it ready for the advent of LTE. Sigurd Thunem, Head of Strategy and Architecture at Telenor Norway, spoke about how the upgrade has progressed so far, and also about the operator’s other LTE preparations.

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ith a share of more than 50% of the mobile broadband market in Norway, we are str iving to boo s t n e twork c apac i t y and

enhance user experience. In the winter of 2009, we decided to renew our mobile infrastructure to better accommodate future mobile broadband services. This involved upgrading equipment across technology generations and frequency bands, including base stations for GSM/UMTS and LTE.

According to our plan, we will swap 6,500 sites by the end of 2011, at the rate of up to 180 sites per week. We are also increasing backhaul, and more than half of our sites will have high-speed backhaul by fiber or high capacity microwave. Other areas include swapping the packet-switched core network, building high-capacity fiber/radio access to selected base stations, and modernizing the operation support system (OSS).

Achieving major benefitsThe swap can help us evolve easily to LTE in the

foreseeable future using the Huawei SingleRAN solution. As different generations of technologies have been introduced to our networks, this poses greater requirements from our O&M efforts.

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The network modernization will deliver a number of benefits to Telenor’s customers, including increased capacity and speed during busy hours and faster time-to-market for new services.

Modernizing our current GSM/UMTS mobile network will help simplify the network structure and build an optimal foundation for the future.

Other benefits include considerably lower costs and better capabil ity to deliver high-capacity services. We have also reduced the number of suppliers from two to the existing one, which increases our flexibility for planning and development by having clear agreements and an easier interface.

More importantly, the swap will help us greatly reduce energy consumption, because we have some fairly delicate equipment on sites. With SingleRAN, we can build a greener network in a more flexible manner. A legacy site required more room to accommodate three cabinets, one for GSM, one for UMTS, and another one for power supply and battery. Now we can place all the needed devices, including power supply, in one cabinet, saving space and reducing power consumption, while lowering costs as well.

The network modernization wil l del iver a number of benefits to Telenor’s customers, including increased capacity and speed during busy hours, new services enabled by increased speed, and faster time-to-market for new services.

Mobile broadband is currently an attractive

— Sigurd Thunem, Head of Strategy and Architecture at Telenor Norway

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but unsustainable service. The exponential growth of data traffic does not bring corresponding revenue; while mobile broadband technologies lack flexibility and bring increased complexity. Therefore, we have decided to think things through longer and launch LTE according to our schedule.

In Norway, data volume consumption per user is growing fast, but we expect growth to slow down as the number of users increases. We will strengthen HSPA roll-out to cover areas with more than 200 inhabitants as well as the major holiday destinations. Telenor does not expect to deploy LTE in Norway, until 2011.

Smooth swap, yet challenges remain

We have so far carried out the network swap at about 200 sites, and the initial experience is quite good. We have no major problems at those 200 sites. The hardware is highly stable, which enables us to pick more features without losing coverage. The KPIs, including voice and data, are also fairly good, and we are very close to pressing the bigger button.

However, there are still some obstacles ahead. The biggest one is time on site, which is closely

connected with customer experience. As we basically pull down the old site and put in a new one, the longer it takes, the longer the customer does not have coverage. For sites with both GSM and UMTS, it is usually not a big problem. However, where there is only GSM, there will be no coverage. Time on site is also very important to make sure we stay on schedule, because if we have to finish swapping 180 sites each week, we can’t spend many hours on each site.

Another big challenge for Telenor is the quality of the fieldwork and documentation. A lot of activities are happening in Norway’s mobile space. Telenor is swapping base stations, TeliaSonera is building LTE, and there are two others building GSM and UMTS networks. So it is very hard to get the number of qualified field personnel that we need. We have to train other people and ensure the quality of their work is up to our standards. As we work with both old and new networks, we need to keep the network KPIs stable. If there is too much focus on building the new network, the old network will be neglected

until something goes wrong.And finally, there is coordination. During the

transition, vendors, field workers, our people and so on have to work together to get the project running, and we need to ensure it is running smoothly.

A multilayer network for the future

We are building a multilayer network platform for the future. Norway is a big country with a scattered population. Building good population coverage requires a very large number of sites, so building 99% UMTS coverage in Norway is impractical. We want to keep the 900MHz GSM network for continuous coverage, voice, and especially M2M services, meaning that GSM may have a longer lifecycle well into the 2020s. It would not be a surprise if UMTS is phased out before GSM.

We will also use a UMTS 2100MHz HSPA network for coverage in urban and sub-urban areas, and plan to enhance the speed to 21Mbps very soon. With the growth of smartphones, building a 2100MHz UMTS network is more important than it thought. We need quite a lot more capacity for UMTS, and also coverage in order to match the explosive growth of smartphones.

We are also going to upgrade to 800MHz and 2600MHz LTE as part of SingleRAN in the same cabinet, with 2600MHz LTE hotspots in traffic-heavy city centers, and 800MHz for national coverage. Our early testing showed that 2600MHz delivered better indoor coverage than 2100MHz. We are also running tests on 800MHz, and the results have been promising.

In a mature phase, for example, when more voice moves to UMTS and data services are further expanded, 1800MHz will migrate from GSM to LTE, covering urban and suburban areas. To improve indoor coverage, we are also trialing femtocell and picocell in some places, and further application will depend on the result.

All these technologies and a mix of terminals pose great challenges to operators in terms of allocating users, applications and service flows to the access network. It is a difficult task, yet we are going to do it on our access network.

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By Joyce Fan Editor: Joyce Fan joyce_fan@huawei.com

Telefónica o2 Germany was determined to leverage its fixed and IMS network assets to create the necessary synergies for the organic growth of its mobile business. To realize this strategic target, and lay the foundation for a future competitive edge in service innovation, the operator has started a journey of service network optimization.

Improving service innovation through service network optimization

Telefónica o2 Germany

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Aiming for synergy among fixed, mobile and IMS

elefónica o2 Germany (o2) operates in the cutthroat German market, where competition from four Tier-1 mobile operators and several MVNOs has

dragged down prices in the last few years. The third largest mobile operator in Germany, o2 recorded the high share of net additions in the German mobile market, with strong organic growth (first quarter of 2010, without HanseNet) in revenue (over 8.8% year over year), OIBDA (over 13%) and mobile service revenue (over 2.4%).

However, according to Informa, mobi le subscription penetration in Germany reached 124% during September 2010, making organic growth increasingly difficult for all mobile operators.

With the acquisition of HanseNet and more than 2,800 DSL-Interconnection points, o2 has emerged as a major fixed-line player. The operator expects its market share to grow during 2011, and is seeking to integrate its mobile and fixed assets in order to provide synergies and explore cross-selling opportunities that can expand its current revenue opportunities and subscriber base.

Approaching a new NGIN platform

As with most mobile operators that have expanded into the fixed domain through an acquisition, merger or by simply leasing capacity from the incumbent, integration issues have been a significant barrier for the introduction of bundled fixed-mobile services.

Traditional telecom networks have relied on vertical silo-based provisioning mechanisms to enable services in each individual network. These silo-based platforms have traditionally been completely separated, and virtually impossible to integrate in order to provide services across fixed and mobile networks.

Moreover, o2’s networks – as with most hybrid operators – had separated Intelligent Network (IN) and Application Service (AS) layers, which, having been used for several years, were also nearing end of life. Effectively, the three physical networks that have traditionally been used to offer services in the mobile, fixed and IMS domains had been separated, resulting in high TCO and making it extremely difficult to offer combined services.

o2 decided to deploy a new platform in which time-to-market would no longer be a limiting factor, unlike previous platforms, which required several years to deploy. Moreover, convergence between the fixed, mobile and IMS domains was necessary, and would conform to standards as well.

A smooth and future-proof evolution

Michael Haeberle, Head of ND Converged Voice, says that, partnering with Huawei, the operator conducted a smooth network evolution to an NGIN platform that enabled o2 to use one platform for mobile, fixed and IMS networks to provide bundled services between all three domains, and create a single service logic to be applied throughout the network. This was achieved by having a centralized entity called the Service Broker that interfaced new and existing services, and could adapt to any service through flexible adapters.

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To sustain its organic growth, o2 is seeking to integrate its mobile, fixed and IMS assets in order to provide synergies and explore cross-selling opportunities.

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No interruption of revenue-generating services

Whenever a new platform replaces an older version, there is always a risk that some subscribers may experience a loss of service. Operators must therefore minimize interruptions and service outages, since these are very detrimental to the operator’s brand as they lower subscribers’ perceptions of network quality, causing churn.

During the upgrade, o2 maintained two platforms in parallel: the older version which had traditionally been used and the new platform provided by Huawei, both operating at the same time and serving subscribers. It ensured that post-installation problems were identified before the new platform went live. “However, no problems were met during this transitional period and it allowed us to switch subscribers to the new platform with no interruption in any service,” says Michael.

Standardized interfaces and protocols

Network operators have traditionally relied on a handful of vendors to deploy their networks, creating a fragmented environment that relies on middleware layers and protocol translations to communicate. This has caused the OPEX to increase with the number of proprietary platforms in the networks due to maintenance, support and training costs.

Michael stresses that platforms based on standardized interfaces are vital for the implementation of new services and key to helping mobile operators come to market more quickly. The operator will also be converging networks throughout its footprint with a unified SDP, making the choice of standardized interfaces mandatory. In this project, standardized interfaces were adhered, making interfacing with current and new equipment a simpler process.

Future-proof hardware platforms

Although current platforms are capable of handling existing and short-term application traffic, operators are mindful about the ability of their networks to handle future traffic.

One of the reasons why o2 selected Huawei’s platform was its hardware concept that is based on the advanced telecommunications computing

architecture (ATCA). This platform is widely accepted as the standard in telecom infrastructure. By deploying this platform, the operator expects that future demands on the network will be quickly tackled by easily upgrading the existing platform through new blade cards.

Grasping new service opportunities

Severa l new se r v i ce s have a l ready been commercialized using o2’s new NGIN platform.

The first is Zone Service, which enables the operator to provide end-users with a location-based charging principle. The end users are informed about their location through an icon on their handsets (e.g. office or home), and communication services are charged according to the prevailing rates for that location.

The second is SSC (Several SIM Card) Service. This unified communication liked service allows users to use several terminals (e.g. terminal and car phone) with the same number. Also, regardless of which terminal the user makes the call from, the call’s recipient will only see the single contact number.

Beyond this, o2 is also pursuing efficient global products and services. For this reason the operator decided to deploy Huawei SDP platform to reduce time-to-market for new services, and cut implementation and operation costs, while potentially expanding these services outside Germany in order to create synergies between national op-cos in different markets in the future.

Acknowledgement: This article is based on a case study and an interview done by Dimitris Mavrakis, senior analyst Informa, with Michael Haeberle from o2. We would like to sincerely thank them, for their time and valuable ideas contributed to this article.

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BiteBy Oscar Claudio Editor: Ranajit S. Dam ranajit.dam@huawei.com

A sharper edge for

An upgrade of the entire 2G, 3G and core networks of Baltic operator Bite has yielded numerous gains: wider network coverage, faster speeds, better sound quality, lowered TCO and a greener network.

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a l t i c ope r a to r Bi t e , wh i ch began providing mobile services in Latvia in 2005 and in Lithuania in 1995, is currently the third-placed operator in

both countries, with an 11% share of the Latvian market, and 21% of the market in Lithuania. In both markets, its main competitors are two Nordic operators: TeliaSonera – which operates as Omnitel in Lithuania and LMT in Latvia – and Tele2.

Apart from the fierce competition, Bite also has to battle a tricky business environment. Due to the prevailing economic climate, calls in the Baltic nations are among the cheapest in Europe; Latvia has the lowest prices in the EU, with calls costing just EUR0.04 per minute on average, and in Lithuania, the price per minute is EUR0.05, compared to the European average of EUR0.13. This means that ARPU in Lithuania and Latvia is about a half of that of Europe, and that in order for Bite to stay competitive in these markets, it needs to provide high quality at prices that are competitive.

Keeping all these factors in mind, Bite worked with Huawei in Latvia in the summer of 2010 to complete a network upgrade project that lasted four months. As part of the project, Huawei installed its SingleBTS in the network, providing average

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It was clear that we needed an all-encompassing solution that included both the service levels and the network management to exceed customers’ expectations, and still offered great value to the customer.

download speed of 6Mbps in 11 Latvian cities and a maximum speed of up to 15 Mbps (21Mbps HSDPA standard). The upgrade also included the deployment of 150 new base stations, expanding coverage and capacity, and prepared the network for future upgrades.

Small operator, big goals

According to Cristobal Alonso, the CTO of Bite, the operator was disappointed by the fact that its prior investment in network improvement had not yielded the desired results. “In Latvia, despite a significant network investment over the past three years, Bite was still behind the competition in terms of both network reality and perception,” he says. “Furthermore, the high level of data traffic growth required a new way to manage capacity and keep driving revenues while simultaneously managing costs. Bite needed to change its 3G roll-out strategy and focus on high-quality indoor coverage to appeal to customers’ expectations and drive revenue growth and market leadership.”

Bite is driven by a lean-operator philosophy, committed to delivering quality and a better customer experience, and looking to minimize the

— Cristobal Alonso, CTO of Bite

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competitive network gap. Cristobal Alonso says its biggest challenge was keeping CAPEX and OPEX low. “We found we could not continue the previous strategy and maintain the same cost and relationship model with our old network partner,” he says.

Also, Bite needed to gear up for mobile broadband. “Although mobile voice adoption is high – partially driven by these low prices – the take-up of mobile broadband services remains at one of the lowest levels in the EU,” Cristobal Alonso adds. “The mobile broadband penetration rate in Latvia was just 1.7% compared to a 5.2% EU average. Thus, mobile broadband – small screen and large screen – is one of the greatest opportunities for mobile operator growth in the region.”

With the economy recovering and the Baltic nations coming up to speed with mobile data trends across the rest of Europe, growth is expected to be the rule. “Initially, the growth has been on the large screen – PCs, so to speak – today there are around 150,000 mobile broadband users in Latvia and Lithuania and we has been very successful with our Vodafone Mobile Connect product,” says Cristobal Alonso. “Traffic is growing dramatically, doubling in under a year in 2010. And now, the small screens of phones comprise the next opportunity, as smartphones currently account for less than 7% of the market. Bite is well-positioned for this growth, as for example we are currently the only provider in the region offering Blackberry devices.”

So Bite decided to partner with Huawei and swap both its radio (GSM, UMTS and LTE enablement) and core infrastructure. The main driver for this project was value creation. Or, simply put, improving network coverage, speed, and quality, along with a lower technology cost of ownership (TCO).

“Our focus on execution has meant having a strong, simple smartphone portfolio and the sales and care organization to sell and service it,” Cristobal Alonso adds. “It was clear, however, that we needed to address the opportunity with an all-encompassing solution that included both the service levels and the network management to exceed customers’ expectations, and still offer great value to the customer.”

The swap takes place

In April 2010, Huawei was selected by Bite to migrate the operator’s entire GSM, UMTS and core networks in Latvia. In all, the project covered 478 sites, and was scheduled to take place between the months of May and December, 2010. However, because of Huawei’s extraordinary commitment to the customer, it was able to complete the project by early November, with the swap itself taking just four months.

As Bite is a small operator with a very lean structure operator, preparation for this project entitles more responsibilities than in other swaps. The Huawei project team was responsible for all the deployment and swap activities, ordering, logistics, network design, optimization, installation, commissioning, acceptance, dismantling and project management, the last task being in cooperation with the operator’s Program Manager and CTO.

However, Huawei was able to deliver ahead of schedule with 99% accuracy, with the agreed quality standard and minimum customer disturbance, a key KPI for the project. New sites were added through the months of November and December, with the project including more than 500 sites by the end of the year. The downtime of between 30

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The network swap helped Bite increase its market share in Latvia, and will improve its TCO by 50% over five years. Bite’s new network is also greener, as the new technology reduced electricity consumption.

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and 60 minutes for the GSM swap ensured that the impact on the network was minimal. In addition, Huawei and its local partners ensured there was a buffer of more than two days during each week for the cleaning up of failed sites. Huawei was also flexible enough to alter its plan on short notice and accommodate new requests from the client.

A customer-focused upgrade

From the start of the project, Bite’s main target was to change user perception of the network. Given how small the market is in Latvia, the user is clearly the most important factor, and during the swap project, both Huawei and Bite spent a lot of time poring over customer complaints and analyses to come up with guidelines for troubleshooting and improvement.

This customer focus paid off with Bite’s network being uniformly hailed as the country’s fastest (and the one providing the best user experience) by the Latvian blogger community.

The network swap provided the following three benefits to customers:

Wider network coverage: More coverage from existing base stations due to the use of state-of-the-art equipment. For example, indoor coverage in Daugavpils, Latvia’s second city, increased by 20% with the existing base stations, not to mention the improvement due to new base stations as well.

Faster speeds: Bite achieved the fastest mobile Internet speeds in 11 Latvian cities and among the fastest in all of Europe. Reaching a maximum download speed of 15 Mbps and an average of 6 Mbps (an ideal speed for streaming video and browsing), Latvia is now among the top five

countries with fastest mobile internet in Europe.Improved quality: Fewer dropped calls both in

terms of absolute and relative values at present. From an operator’s perspective, the network

swap has helped Bite Latvia increase its market share and achieve positive EBITDA for the first time. The deal with Huawei will also help Bite improve its TCO by 50% over five years. Bite’s new network is also greener than ever, as the new technology reduced electricity consumption by 20%, thus cutting CO2 emissions. This was possible because of passive cooling, fewer cables and use of mainly outdoor equipment.

With the number of customers continuing to grow, Bite is currently working with Huawei on ways of extending coverage and services in future, and also planning an LTE trial in 2011.

“Together with Bite, we have succeeded in modernizing the entire mobile network within four months, proving how efficient a team of professionals from different countries can be when working together to reach a common goal,” says James Chen, Managing Director of Huawei’s Nordic & Baltic office. “In our partnership with Bite, we have built a local team of experts and we will continue to invest in the Baltics.”

Cristobal Alonso is looking ahead to the future, as the new network is already GSM/UMTS and LTE enabled. “All our equipment is LTE enabled and only needs software upgrades in the future,” he says. “As soon as demand and handsets emerge, together with the regulatory approval, Bite Latvia will be able to continue to offer its customers the most advanced mobile Internet experience. Also, as the network is future-proof, it will enable Bite to continue growing together with Latvians.”

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By Xue Hua Editor: Xue Hua xuehua@huawei.com

Following more than one year of construction, the WCDMA network of China Unicom has achieved comprehensive coverage through a total solution featuring 3G coverage for dense urban areas, precision

coverage for mobile scenarios, deep indoor coverage, and supplementary WLAN coverage. This has laid a solid foundation for China Unicom to further develop mobile broadband services.

China UnicomTaking network coverage to the next level

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n 2009, after it was granted a 3G license, Ch ina Un icom f lung i t s e l f in to the construction of its WCDMA network, aiming to deliver a quality network in which

2G and 3G could develop in a coordinated manner. During the process, the most critical challenge facing China Unicom was network coverage.

3G coverage in dense urban areas

Recent years have witnessed a city-building boom throughout China, with numerous new buildings erected in urban areas. This made it imperative for China Unicom to solve the problem of mobile network coverage in cities, including dead zones in high-rises, poor mobile network coverage in newly constructed areas, and difficulty in constructing sites in dense urban areas.

In particular, Shanghai, China’s largest city, presents such coverage challenges. After one year of construction, China Unicom’s WCDMA network had covered almost the entire city. However, site construction was difficult due to the city’s complex geographical characteristics, numerous skyscrapers, and the increasing eco-awareness of its residents keen to protect their rights. This was especially the case in areas within the inner ring that are densely populated. Network KPIs thus had great room for improvement.

To solve this problem, China Unicom Shanghai set up a project team with Huawei to research a precision coverage solution. The team decided to achieve 3G coverage by adopting Huawei’s

heterogeneous network (HetNet) solution (a main part of the SingleRAN@Broad) for the WCDMA network and using femtocell, 80W RRU, dual RRUs, and integrated RRU antennas. The Special Dual-RRU Coverage Project, after being trialed initially at a few base stations and then at 350 others, has enhanced the coverage effectively. Highly valuing it a special dual-RRU coverage solution, China Unicom Shanghai has used it as a regular technical means for coverage optimization in 2010, setting a good example for operators on how to use WCDMA network coverage solutions flexibly.

In the 3G network performance test arranged by China Unicom in 2010, the Shanghai branch ranked in the top bracket thanks to the significant improvement in the WCDMA network quality and a nearly 10% increase in effective coverage. It is obvious that the HetNet solution was the right choice for China Unicom’s coverage objectives, enabling its WCDMA network to offer a better voice and mobile data experience to end users.

Precision coverage for mobile scenarios

Among outdoor mobile scenarios, high-speed railways and scenic spots are the top priority for China Unicom. The coverage difficulties in the high-speed railway scenario lie in site selection, capacity expansion, and high construction costs.

In Zhejiang Province, for example, China Unicom has cooperated with Huawei in precision coverage by adopting key technologies such as dual-RRU co-cell, daisy-chain networking, enhanced

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automatic frequency control (AFC), independent location area, and fast in/slow out. The two parties have also conducted on-site tests and optimization. When a high-speed train travels at a speed of over 400km/h, wireless coverage by China Unicom’s network reaches 99.8%. While sitt ing on a Shanghai–Hangzhou high-speed train, users can talk over the phone as clearly as, or surf the Internet as fast as if they were in the office.

The WCDMA high-speed data network fully meets live TV broadcast requirements on high-speed trains. In November 2010, when the Shanghai–Hangzhou high-speed railway was put in service and running at a speed of more than 350km/h, reporters from Hangzhou TV, with their cameras connected to the network, filmed standard-definition videos and streamed them to the TV station for live broadcast. “The voice and footage are clear and smooth, representing the actual conditions within the train cars in real time. We believe this is a historic moment,” one of the reporters said excitedly.

For expressway coverage, China Unicom conducted a comprehensive study, which led to a suite of low-cost solutions making full use of new technologies such as the mini equipment shelter. In the provinces of Yunnan and Hunan, it adopted Huawei’s single-cabinet solution for its mini shelter. The mini shelter features cabin-specific temperature control, compact design, and fast deployment. Compared with traditional equipment rooms, the mini shelter is smaller, with the footprint reduced by 60% and the power consumption cut down by 40% to 80%. In addition, the mini shelter is faster to deploy. It has proven to be a total solution to the problems troubling China Unicom such as

difficulty in site acquisition, high OPEX, and a long deployment cycle.

Deep indoor coverageIt is estimated that 10% to 15% of indoor

distribution systems were not constructed as required in major provinces and cities of China in 2009, mainly involving governmental departments, hospitals, residential buildings, department stores, and office buildings. These scenarios, however, are where 3G services are most frequently used.

New model for building indoor distribution system

In its initial WCDMA network construction, China Unicom used the construction model for 2G networks. Under this model, the construction of an indoor coverage network is generally initiated by the operator; the indoor distribution network is designed and constructed by an indoor distribution system provider, while the outdoor macro network is planned and constructed by the principal equipment vendors. Therefore, there is no single party responsible for the quality of the network end to end. Sometimes the indoor distribution system provider and the principal equipment vendors tend to shun responsibility. In this case, a lot of coordination is required, leading to low efficiency. Worse, problems cannot be solved as soon as expected, eliciting complaints from end users.

To define the responsibility for WCDMA network construct ion and ensure network quality, China Unicom pioneered the practice of

China Unicom had to solve the problem of mobile network coverage in cities, including dead zones in high-rises, poor mobile network coverage in newly constructed areas, and difficulty in constructing sites in dense urban areas.

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contracting Huawei and other main equipment vendors for indoor coverage system construction and having them responsible for end-to-end project management. By leveraging Huawei’s rich experience in the construction of indoor and outdoor coverage systems worldwide and its unique technical advantages in coordinated indoor and outdoor coverage as well as in network planning and design, the operator successfully rolled out one single network for both indoor and outdoor coverage in Guangdong and Guangxi.

This new model allowed China Unicom to reduce investment in materials by about 23% for the indoor distribution system and cut its per-unit area investment by about 18%. The well-planned cells and purely passive indoor distribution design required fewer repeaters and trunk amplifiers, and reduced indoor coverage faults by more than 90%. The professional indoor distribution optimization service guarantees a brand-new data service experience. The practices of China Unicom in Guangdong and Guangxi prove that the involvement of principal equipment vendors in the construction of indoor coverage systems can strike a balance between the coverage, capacity, services, interference, testing, and cost, providing more effective support for the development of indoor data services.

Use of femtocell to improve indoor coverage

Through survey and analysis, China Unicom found three major causes of inadequate indoor coverage. First, the WCDMA network, running at the 2.1GHz frequency band, has poor penetration

capabil ity, rendering signals weak indoors. Second, in the traditional construction of an indoor distribution system, it is difficult to have the property owner cooperate and implement engineering indoors, which easily causes damage to the building. As such, parts of the indoor area are not covered by the indoor distribution network. Third, in scenarios that are small or not very large, the traditional indoor distribution solution is not cost-effective and therefore has a low ROI. In this case, telecom operators often fail to fully meet the indoor coverage requirements.

To build a quality network and improve the deep indoor coverage of the WCDMA network, China Unicom organized a meeting for industry experts and certain equipment vendors to look at various solutions. Building on this, the operator worked out a roadmap for deploying femtocell stations based on its existing fixed broadband access resources to eliminate dead zones and achieve deep coverage indoors. Joining hands with Huawei, it began to deploy femtocell stations on a trial basis in certain provinces and municipalities, including Beijing, Zhengzhou, Jilin, Shenyang, and Hainan because it was easy to find sites for femtocell stations and to install them at a low cost.

During the Bo’ao International Tourism Forum held in Hainan in March 2010, China Unicom successfully pushed tourist information through its femtocell stations. When tourists passed airport exits or arrived at the entrances of scenic spots, the femtocell platform automatically pushed the latest multimedia tourist information and routes to the handsets of tourists. Such an automatic push of accurate location information over the femtocell

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network pioneered the innovative tourism model, diversifying tourist information types, transferring information to recipients more accurately, and improving QoE.

WLAN for supplementary coverage

Architecturally, a mobile network is more complex than a fixed network; the RAN gateway is expensive and the transmission cost for a mobile broadband network is prohibitively high. As a result, costs for mobile broadband are much higher than those for fixed broadband. China Unicom believed that it should be a simple, practical solution to leverage its advantages in the fixed network to mitigate the traffic pressure on the mobile network. After its WCDMA network and services were consolidated, China Unicom initiated its “WCDMA + WLAN” strategy.

China Unicom highly values Huawei’s WLAN solution, which features carrier-level wireless control, high capacity, high performance, high reliability, and capability of support for the future IPv6 network and network security. Starting from December 2009, the operator has worked with Huawei in WLAN solution deployment on a trial basis in Jilin, Beijing, and Shandong.

The pilot 2G/3G/WLAN convergent network in Shandong has been successfully connected to the commercial system and delivered services to users across the province. Based on the unified authentication system of the SingleSDB, Huawei provides two access modes for China Unicom subscribers so that they can choose to access the network automatically or manually. In addition, the

WLAN network can take over part of broadband access services, and boasts more diverse service features such as the packet switched (PS) services. After the WLAN network is put into commercial use, subscribers can use data services such as multimedia service (MMS) and videoconferencing easily without needing to input passwords. This makes China Unicom well prepared for further business development and provides good experience for massive WLAN deployment in the future.

To innovate and lead in 3G

In October 2010, one year after it commercializing its 3G services, China Unicom saw its 3G subscribers grow to more than 10 million, making its WCDMA network the largest of its kind in the world. Lu Yimin, General Manager of China Unicom, said on the occasion of the “First Anniversary of 3G Commercialization” celebration that his company’s WCDMA network has covered almost all cities at the county level and above, while supporting international roaming over 169 telecom operators’ networks in 87 countries and regions. This network has greatly boosted the development of various 3G services of China Unicom, including mobile Internet, mobile music, mobile TV, mobile reading, application store, and mobile payment.

With its WCDMA network achieving superb coverage , China Unicom wi l l success fu l ly implement its strategy of “3G leadership and integrated innovation” and continue to cement cooperation with all partners on the information service value chain so as to construct the best network, create the best products, and provide the best services.

In October 2010, one year after it commercializing its 3G services, China Unicom saw its 3G subscribers grow to more than 10 million, making its WCDMA network the largest of its kind in the world.

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China Unicom

By Yang Xin Editor: Xu Peng xupeng@huawei.com

Guangdong scores high during Asian GamesThe 16th Asian Games opened in Guangzhou on November 12, 2010. Being the largest Asian Games ever, with many participants and a number of widely distributed venues, the event posed huge, diverse challenges to the communications network.

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ithout the built-in GPS of the iPhone 4 provided by China Unicom, we could not have made it to our

destination – the Guangdong Olympic Sports Center – as quickly as we did,” says a Guangzhou resident surnamed Hu. “Apart from locating this Asian Games venue, the iPhone 4 gave me a full view of surrounding landmarks, along with close-ups of the same. With good picture quality, the iPhone 4 acted as the ideal navigation expert for an inexperienced driver like me.’’

During the Asian Games, held in Guangzhou during the month of November, 2010, Hu was among a large number of sports fans who benefited from the communications network of China Unicom Guangdong, which really stepped up to ensure a great user experience.

Preparing well in advance

The 16th Asian Games opened in Guangzhou on November 12, 2010, with the participation of more than 10,000 athletes from 45 countries and territories. The athletes competed in 28 Olympic and 14 non-Olympic disciplines, supported by a total of 53 competition venues and 34 training venues. Being the largest Asian Games ever, with many participants and a number of widely distributed venues, the event posed huge, diverse challenges to the communication network.

To tackle these challenges, China Unicom Guangdong, as one of the members of the ICT guarantee team under Coordination Committee

for the Games, responded quickly to the “Digital Guangzhou” and “Digital Asian Games” plan, beginning preparations months before the event itself.

The operator set up special task forces to guarantee communication and support network management. Preparatory efforts were made across the board in the areas of spare parts, emergency vehicles, tools and backup solutions to ensure rapid response by on-site engineers and remote expertise. And it put in place a 24/7 monitoring of all the equipment rooms and service areas to be used during the Games.

On the back of such meticulous organization, China Unicom Guangdong was able to reap fruitful results, with 1985 hidden risks identified and dealt with, covering comprehensive areas in core network, pipeline, transmission, access network, base station power supply and other facilities.

The operator also made further enhancements to its backbone equipment and DNS system to strengthen Internet security, with the DDoS system specially developed to deal with network assaults and guarantee smooth network operation.

To del iver maximized network resource utilization and optimum user experience, China Unicom Guangdong developed specific solutions to guarantee capacity and network operation for different venues, and identified strategies for capacity-load sharing as per the GSM/WCDMA voice model, collected information and network quality analysis. Aside from all this, a multi-level emergency response system was put in place, with a total of 15 emergency solutions covering the widely distributed venues.

Having developed its communication system for the Asian Games, China Unicom Guangdong

“W

China Unicom Guangdong mainly used Huawei’s SingleBTS which supports both HSPA+ and LTE for its WCDMA network. As a result, China Unicom Guangdong has deployed the largest known HSPA+ network in the world.

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was able to achieve real-time monitoring and resource allocation, covering its whole network, 53 competition venues, 117 five-star hotels and 17 transportation hubs. Its international roaming signaling monitoring system provided real-time analysis into roaming businesses in the 21 cities and regions of Guangdong province, with the networks of 341 overseas telecom operators. Innovative utilization of its UNI-VIDEO commanding platform and multimedia scheduling system allowed it to deal with emergencies quickly via visualized control and monitoring.

Largest HSPA+ network in the world

China Unicom Guangdong invested RMB706 million in the construction of a wireless network for venues of the Games and a local transmission network for the cities involved, making WCDMA services available across all venues, airports and major transportation hubs.

Specifically, China Unicom Guangdong resolved GSM/WCDMA network coverage and capacity issues for major hotels and roads, with a focus on Asian Games Town, Haixinsha Island, which was used for opening and closing ceremonies, and the banks of the Pearl River. Seamless coverage was delivered to cover the 2.73 square kilometers of the Asian Games Town, 100 buildings, more than 80 venues in the cities of Guangzhou, Foshan, Dongguan and Shanwei, as well as 114 major roads (1,681 kilometers long in total). Some 208 sites were established along 43 major highways province-

wide to guarantee coverage, with 72 sites set up for important roads and areas in Guangzhou.

The operator also made HSPA+ enhancements to 4,579 base stations in the core areas of the four cities and venues for the Games, with WCDMA wireless speeds of up to 20Mbps. Moreover, it upgraded its EDGE functionalities for base stations in other important areas, ensuring smooth communication during the opening and closing ceremonies.

China Unicom Guangdong mainly used Huawei’s SingleBTS for its WCDMA network. Supporting both HSPA+ and LTE, the BTS can be upgraded using software, ensuring smooth network evolution and reducing equipment investment. As a result, China Unicom Guangdong has deployed the largest-known HSPA+ network in the world.

To ensure high service quality, the operator fully analyzed the unified bearing needs of GSM, WCDMA and WLAN services in stadiums and hotspot areas. Adequate bandwidth is required to ensure the QoS of voice services, while data services generally generate burst bandwidth with unbalanced traffic demands. And to deal with these, China Unicom Guangdong decided to adopt Huawei’s Hybrid MSTP solution to build the bearer network, which greatly helped to ensure smooth communications during the 2010 Asian Games.

“Huawei’s Hybrid MSTP solution was able to fully bear the load during the Asian Games,” says Wang Zhe, Deputy CEO of China Unicom Guangzhou. “The solution could support good network performance of both GSM and WCDMA networks in hotspot areas like stadiums, airports, and transport hubs, as well as efficient bearing of WLAN services.”

China Unicom Guangdong also optimized all

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related telecom facilities, including transport lines, backbone network, international central office, and operation support systems. Using Huawei’s cluster router NE5000E for the metro networks of both Guangdong Province and Guangzhou, China Unicom helped greatly enhance the communications efficiency of the Asian Games.

Offering 2.56T capacity, the NE5000E 2+2 cluster router helped the operator flatten its network architecture with expanded capacity. With In-Service Hardware Expansion (ISHE), the system can be smoothly expanded to 200T in the future. Moreover, the NE5000E system emits the least carbon in the industry, contributing to a green Asian Games. China Unicom Guangdong also adopted Huawei’s MSC Pool to build a mobile core that has high reliability, performance and efficiency.

Sound network, splendid Asian Games

During the closing ceremony of the 2010 Asian Games, many viewers used their iPhone 4 to record videos and posted them on their blogs, and thus were able to share the excitement with their friends.

Leveraging the WCDMA/HSPA network, China Unicom Guangdong launched five featured services under its “WO” brand. Focusing on the Asian Games, the services included mobile TV for live broadcasting, mobile music, mobile Internet, a mobile newspaper for the latest Asian Games information, a mobile microblog, and more.

Through the mobile TV platform, subscribers could enjoy the Asian Games live or watch other programs. Subscribers could also download the

theme music of the Asian Games, in addition to other songs. China Unicom Guangdong also opened a special online column, helping subscribers learn the latest Asian Games news, event schedules, stadium layouts, weather reports, and more.

The operator also rolled out various mobile newspapers, which enabled subscribers to keep track of the latest event information. Meanwhile, the mobile microblog was also well received among subscribers. Statistics showed that, China Unicom’s iPhone users made up the largest percentage among all the mobile TV viewers, thanks to the sound performance of the operator’s WCDMA network.

With zero network accidents, network failures or breakdowns, China Unicom Guangdong’s network ran stably during the Asian Games. In Guangzhou city, the GSM network recorded over 5.78 million Erlang, while WCDMA saw 929,000 Erlang. In addition, WCDMA data traffic reached 71,000GB, the number of international calls hit 2.39 million, and contact centers offered international services 7,023 times.

After the successful closing of the 2010 Asian Games, China Unicom Guangdong sent a thank-you letter to Huawei, stating that Huawei has greatly helped the operator secure smooth and high-quality communications during the Games, which showcased Huawei’s excellence in network OAM and high social responsibility.

The 2010 Asian Games was a splendid sports even, fully living up to the motto of “Thrilling Games, Harmonious Asia”, and China Unicom’s WCDMA network added unique value to the Games by providing high-quality WCDMA services and helping people to better enjoy the convenience and fun of mobile services.

China Unicom’s WCDMA network added unique value to the 2010 Asian Games by providing high-quality WCDMA services and helping people to better enjoy the convenience and fun of mobile services.

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