voice from operators perspective tao of business winners ... · countries, telenor was dedicated to...

Voice from Operators Tao of BusinessPerspective Winners

ISSUE 4ISSUE 401/10

Digicel bridging island communication

Sonaecom: the challenger triumphs

Singapore powered by smart communications

ISSUE 4

Telenor Group painting a sustainable future

2009 has been a tremendous year for the telecom industry, which has changed and developed as rapidly as ever despite the shadow of pessimism cast by the fi nancial crisis. With the real economy hard hit and commercial activities increasingly dependent upon IT and the Internet, cyber business has never been stronger. Coupled with the gradual shift of both the professional and social worlds to networks, this is putting pressure on network bandwidth.

Streaming video services and the “HD + on-demand” experience model are becoming dominant on networks, driving a change in user experience and lighting the new road operators are taking in terms of business models. Th is requires operators to change correspondingly. While extending value beyond the pipe by way of digital supermarkets, they must expand their service portfolios through mobile broadband, transcend the demographic boundaries through M2M, and catalyze network convergence through home networking.

Fuelled by technology and QoE expectations, the industry is entering an ultra-broadband age that is set to swamp networks with over 1,000EB annually–the so-called exafl ood. Th e resulting requirements for network development and O&M present operators with a daunting challenge.

Th e philosophy of former NHL star Wayne Gretzky was to “skate to where the puck is going to be, not where it’s been.” Likewise, operators must respond proactively to succeed in this ultra-broadband age. New sources of revenue must be developed to boost ARPU, bandwidth provision must match QoE expectations, and CAPEX and OPEX must be strictly controlled.

This recession has set the industry thinking soberly and critically. A new business environment requires adaptation and new competitive weapons framed within fresh business models. In this issue of WinWin, we look at some best practices and success stories of our customers: the Telenor Group is prepared strategically and tactically; as Portugal’s mobile broadband leader, Sonaecom is well on the journey of convergence; Russia’s MegaFon has undergone a successful anti-cyclic expansion; China Telecom Shaanxi has deployed a future-proof network to tame the exafl ood.

2009 also witnessed the debut of WinWin magazine, through which we have been able to get closer to our customers and benefi t from their insights and wisdom. In 2010, we will continue to build WinWin into a platform for discussing major industry trends, issues, and success stories. Doing so will continue to benefi t us and our customers, partners and peers as we walk together toward a sustainable and promising future.

Change to winSponsor Huawei Technologies Co., Ltd.

Publisher Huawei COMMUNICATE Editorial Board

Consultants Hu Houkun, Xu Zhijun, Xu Wenwei, Ding Yun

Zha Jun, Yu Xiangping, Liu Dongfang

Editor-in-Chief Gao Xianrui ([email protected])

Editors Pan Tao, Julia Yao, Xue Hua, Xu Ping, Joyce Fan

Xu Peng, Li Xuefeng, Chen Yuhong

Liu Zhonglin, Michael Huang, Zhu Wenli, Long Ji

Wang Hongjun, Mike Bossick, Gary Maidment

Art EditorZhou Shumin

ContributorsZhu Yonggang, Liu Nanjie, Hu Chang, Xing Jingfan

Wesley Wei, Zhang Dongliang, Jiang Yilin, Zuo Shuai

He Zhongwen, Guo Zhenxing, Gao Mingqiang

Chen Yali, Xiao Ersong, Mulebeke James Alvin Willy

E-mail: [email protected]

Tel: +86 755 28356172, 28356173

Fax: +86 755 28356180

Address: A10, Huawei Industrial Base,

Bantian, Longgang, Shenzhen 518129, China

Publication registration No.: Yue B No.10148

Copyright © Huawei Technologies Co., Ltd. 2010. All rights reserved.No part of this document may be reproduced or transmitted in any form or by any means without prior written consent of Huawei Technologies Co., Ltd.

NO WARRANTYThe contents of this document are for information purpose only, and provided “as is”. Except as required by applicable laws, no warranties of any kind, either express or implied, including but not limited to, the implied warranties of merchantability and fi tness 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 profi ts, business, revenue, data, goodwill or anticipated savings arising out of or in connection with any use of this document.

Ding Yun

President of Huawei Global Solution Sales Dept.

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

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 fi erce market, delve into their secret to success, and learn from the winners in the industry.

WHAT’SINSIDE

Sonaecom: the challenger triumphs05

Courage is needed to realize full convergence. Equally, great wisdom is needed to debut the fi rst mobile broadband service and sustain a leading position. Luís Filipe Reis, former COO of Sonaecom, shares his willingness to challenge the conventional industry mindset.

Digicel bridging island communication09

Since launch in 2001, Digicel has changed the communication landscape in many island regions and truly made a diff erence for island residents. Brian Finn, Group Commercial Director attributes their achievement to its commitment and understanding of the island markets.

Voice from Operators

01/10

INSIDE

Issue 4

Telenor Group painting a sustainable future01

How mobile communications can sustainably change lives and catalyze socioeconomic development? Where is the next driver for the industry? Jon Fredrik Baksaas, President and CEO of the Telenor Group answered the questions with their successful practices and pioneering initiatives.

Winners

Three Clouds for future mobile broadband

23

Future mobile systems invariably prioritize economical bandwidth provision comparable to fixed network, but with added ubiquity to enhance the end user QoE and drive the information age. An ultra-broadband wireless system must integrate various wireless technologies, and the Three Clouds solution is no exception.

ABC: taking on ultra-broadband challenges with ease

13

New network technologies and the drive to improve the quality of user experience (QoE) are driving us towards the ultra-broadband era. It is estimated that 1000EB of data will be generated each year in this era. An ocean of information will flood networks, necessitating new approaches to network construction and operations. How can operators prepare for the challenges ahead?

M2M: the Internet of 50 billion devices19

Machine-to-Machine (M2M) communications is a healthy sector that’s expanding rapidly and generating significant revenues for mobile network operators (MNOs). Yet, to take a more direct role in the value chain, there are underlying challenges that should be addressed, principally the need to look beyond their traditional business and operational models.

Perspective

Tao of Business

Singapore powered by smart communications

27

EMOBILE, Japan’s rising star in mobile broadband

42

Baidu searching speeds up39

E-government in Uganda49

Nextel : winning both PTT and 3G broadband

45

MegaFon moves with IP confidence31

China Telecom Shaanxi gears up for exaflood of traffic

35

In response to the pressures from surging traffic and network optimization, China Telecom Shaanxi has developed and implemented a whole set of solutions to deal with explosive bandwidth growth from IP backbone to metro core, and from back-to-back to 2+4 clustering.

Win-Win / JAN 2010

VOICEFROM OPERATORS

Telenor Group painting a sustainable future

Bridging the digital divide to growth

o one doubts the role telecom plays in the social and economic life, and Telenor’s pioneering initiatives typify its far-reaching effects in developing countries. Mr. Baksaas

recalls that “The Telenor Group entered emerging markets almost 15 years ago and witnessed a strong growth in economies, and, the Telenor Group has been part of it.”

Having topped the Dow Jones Sustainability Indexes for two years running, the Telenor Group exemplifies how mobile communications can sustainably change lives and catalyze socioeconomic development. During the 2009 GSMA Asia Mobile Congress, Jon Fredrik Baksaas, President and CEO of the Telenor Group, granted an exclusive interview to WinWin and explained how the telecom world is continuing to shape society with the Telenor Group’s successful practices and pioneering initiatives.

N

Witness and participate

Telenor’s mobile customer base has enjoyed phenomenal growth across the group’s active markets, with demonstrable economic benefits for local people: “Some analysts estimated that a 10% mobile penetration rate generates 1-1.2% of a nation’s GDP, which testifies to the relationship between mobile communications and socioeconomic progress.”

The Telenor Group began investing in emerging markets in the belief that mobile communications could fill the gap left by a legacy insufficiency of fixed line connectivity. “It’s not just the affluent parts of emerging markets that need to communicate–the developing areas do too.” Mr. Baksaas explained Telenor’s insight into enriching life through communication while achieving growth in low ARPU markets. “If you can repackage mobile services in a way that makes them affordable and bring some innovative ideas into the mix, then you can really build up a new platform of users. In the Telenor Group, this is particularly feasible in Pakistan, Bangladesh and also in India which is our new operation, which was launched on December 3rd

2009.”

1

By Joyce Fan

Win-Win / JAN 20102

The Nordic countries will probably be one of the fi rst regions in the world that will use and benefi t from 4G services. We are very much looking forward to bringing cutting-edge innovations into Norway.

— Mr. Jon Fredrik Baksaas, President and CEO of the Telenor Group

Win-Win / JAN 2010

VOICEFROM OPERATORS

Beyond basic telephony

Grameenphone, Telenor’s subsidiary in Bangladesh, has pioneered in several exciting initiatives such as the Village Phone, Community Information Center (CIC) and HealthLine. These have brought people into the communications loop and kick-started the social economy with accessible and much needed services, also, brought profit growth and international awards to the company itself.

While at the early stage of its operations in developing countries, Telenor was dedicated to connecting the unconnected, currently, the Telenor Group is engaged in the mobile money arena to bank the unbanked. Rather than just an attractive add on, the mobile money concept is vital to supporting economic development in areas without adequate banking services. Remittances, in particular, offer convenient and equal opportunity to financial service to low income and rural households, and, in most cases, represent the first access to financial services. The likely knock-on economic effects can only benefit communities.

Based on the successful practice of DTAC’s ATM SIMs in Thailand and Billpay in Bangladesh, Telenor Pakistan rolled out its mobile money service, Easypaisa, in November 2009. Through a joint venture with Tameer Microfinance Bank, Telenor Pakistan is providing branchless banking services that include bill payments and domestic remittances. To reach more people, the project plans to increase its number of agencies from 4,000 to 20,000 by February 2010.

Mobile internet: the next growth driver

Having experienced the high of rapid growth and

3

We can create sustainable growth if we can release the power of our technology into other industries. The answer lies in M2M, and the ICT sector is well-

placed to plant the seed and nurture this ecosystem.

its rewards, operators have hit a glass ceiling. However, the Telenor Group has already begun tapping into the industry’s new driver: mobile internet.

Identify new growth point

Like many other operators, the group has much experience of mobile voice saturation, particularly in the Nordic region. “This question has plagued us for years. Even in the 90s, Scandinavia was approaching saturation.” However, there are always opportunities. “We experienced 5% growth in mobile use in 2009’s summer and, basically, we’ve mobile internet to thank.”

New and simple plug and play services are jumping on the back of high speed mobile internet access to be embraced by the public. Mr. Baksaas explained that not only does mobile internet cause a nation’s GDP to grow, saying that roughly 1 to 1.5% additional GDP can be achieved by growing the Internet access into the population, it also has a range of other roles: “Education, health programs, and government services can all be strengthened and accessed more quickly and easily. Rural development can accelerate and spread in a different way because of this access.”

Making it happen

The Telenor Group has begun building its high speed mobile internet platform in the Nordic countries. Telenor Norway is partnering with Huawei to replace its mobile infrastructure in a project that covers different generations of technology and frequency bands, multi-base stations for GSM, UMTS and LTE networks. “The Nordic countries will probably be one of the first regions in the world that will use and benefit from 4G services, which will no doubt be remarkable works of innovation. We are very much looking forward to working with Huawei to bring cutting-

Win-Win / JAN 20104

edge innovations into Norway.” While Mr. Baksaas considers different markets to be

in different phases, the development trend of mobile internet is generic. “In Asia, many markets are growing, which tends to be talked of in customer numbers. Like Europe, though, Asia will become saturated. Additionally, applications that are popular in one market don’t necessarily do well in another. However, the internet is a common thread linking the global market–providing internet access through a mobile phone is the new way forward. We must make this platform accessible first.”

Combining growth with sustainability

Mr. Baksaas believes that economic development must follow a sustainable development curve. “Climate change, energy concerns and pollution are not new. Every industry has analyzed the contribution it can make to reducing energy consumption and pollution. The telecom world is no exception.”

Regarding the new, energy-lean and CO2-lite equipment models, Mr. Baksaas believes there are some splendid results coming out of the cooperation between providers and venders. “Grameenphone and Huawei won the Green Mobile Award from the 2009 GSMA Asia Mobile Congress for a solar power initiative that scrapped the previous dependence on diesel and solved the no power grid issue.”

Mr. Baksaas is very pleased with what Grameenphone and Huawei achieved with their green initative. About 43% improvements are achieved by replacing legacy core network equipment. Hybrid solar plants generate 88% energy–a major shift from fossil fuel based operation. Traffic dependent controls are set to optimize power consumption in BTSs–tests in a controlled environment show that 15-20% of BTS cabinet energy will be saved. Grameenphone and Huawei are continuing to research this area with an eye on large scale application. The trial use of Intelligent Ventilation System (IVS) is another research initiative aimed at reducing base station cooling energy that is proving extremely viable with prospects of saving around 60% of cooling energy from site or 30% of total site energy. “This is for a single network. Scaling it up is the next step.”

M2M: more communication, less carbon

The telecom industry harbors big ambitions that expand

past its own borders and looks at how telecommunications can help other industries enhance energy consumption patterns and efficiency. “We can create sustainable growth if we can release the power of our technology into other industries.” Mr. Barksaas believes that the answer lies in Machine to Machine communication (M2M). “We can supply the connectivity; the networks are our portal. By cooperating with partners in other industries, we can enable new solutions like smart grids, smart logistics and smart buildings, which will help us walk in the right direction.” The ICT sector is well-placed to plant the seed and nurture this ecosystem: Telenor is reportedly the dominant provider of wireless M2M connectivity with the largest installation base of M2M SIM cards in Europe.

Moreover, the Telenor Group has two major subsidiaries working toward this aim. Telenor Connexion applies ten years’ experience to channel its managed connectivity offerings for machines, devices and vehicles into three areas: global connectivity solutions, M2M enabling services, and professional management services. Telenor Objects, a new concern in the Telenor family, is planning a platform for smart information-sharing across industries based on a layered, open approach that comes under a new infrastructure.

“However, these initiatives are still in their early stages–there are risks and challenges we need to overcome with tests and trials.” In Telenor, there is a pretty significant installation of automatic metering of households electrical consumption in Sweden. “We have installed base for 870,000 households, and it is all based on GSM technology for automatically metering. This is a warm example on how M2M can contribute because the provider of electricity can deploy an intelligent and efficient way of metering the electricity and at the same time offer additional services such as energy saving advice, temperature control or in-house energy management to their customers. There is a phenomenal potential for reducing energy consumption and CO2 emissions.” There is still room for improvement, “Technologically, the project is successful, but we need to work on the cost structure to facilitate its widespread infrastructural application.

“M2M would be the right direction and have massive application potential, but this cannot be realized unless other industries and sectors are capable of cooperation. Equally, governments have to come on board and put in place the conditions for enterprises to maneuver towards this goal.” Mr. Baksaas looks for global cooperation if we wish to provide a solid base for future generations: “The ICT sector alone is not capable of realizing our shared vision of sustainability.”

Editor: Gao Xianrui [email protected]

Win-Win / JAN 2010

VOICEFROM OPERATORS

5

the challenger triumphsGreat courage is needed to realize full convergence. Equally, great wisdom is necessary to debut the first mobile broadband service and sustain a leading market position. Luís Filipe Reis, former Executive Director and COO of Sonaecom, in Portugal, typifies the company’s entrepreneurial spirit with his willingness to challenge the conventional industry mindset, as he explains in this exclusive interview with WinWin.

By Michael Huang

Convergence is easier than it seems

here is much to consider when it comes to the concept of convergence, including staff resilience, varied customer requirements, and an array of standards and technologies. However,

Mr. Reis maintains that, “Convergence is easier than we think before we start.”

Fully convergent journey

The first approach Sonaecom took was to merge key departments to streamline and ease the convergence process. Mr. Reis recalls that, “The toughest step for us in this convergence process was to deal with both teams’ expectations. Once you get people’s buy-in, it is very easy and the savings are really very significant.”

In 2001, Sonaecom initiated an ambitious program of integration of its supporting areas such as HR, Legal and Regulation, Finance, amongst others, creating a strong shared services structure. Three years later, the company combined its forces into providing an integrated customer service system. After establishing a unified technical and operation team to cover the fixed and mobile areas in

T2005, Sonaecom successfully merged its telecom operations under the umbrella of one company with a single CTO. In 2008, the company concluded this process by integrating marketing and sales business units from the fixed and mobile fields, into a single telco area.

Sonaecom is now a fully convergent operator from a technological, systemic, and network perspective. With a convergent core and an IMS platform underpinning both fixed and mobile services, customers only see a difference from the access perspective whether they use a fixed or mobile solution. However, Sonaecom has fully converged on the network and system that impact customer services and experience, such as billing.

Very recently, Sonaecom combined its corporate brands into the single brand Optimus, to cover wireline and mobile services for the corporate and SME segments. As Mr. Reis explains, “We approached corporate segment first because we believe corporate customers are the ones that most value convergent solutions.” Indeed, convergence has been a reality for Sonaecom’s corporate and SME customers since January 2008.

The home market, however, is a different story, and Sonaecom targets this segment with two brands of Optimus and Clix. Mr. Reis explains that, “We don’t see yet any movement from the residential customer that justifies a completely convergent approach, because it’s not enough

Sonaecom

Win-Win / JAN 2010

The toughest step for us in this convergence process was to deal with both teams’ expectations. Once you get people’s buy-in, it is very easy and the savings

are really very significant. Sonaecom is now a fully convergent operator from a technological, systemic, and network perspective.

to have two products bundled together. The only thing customers ask for is a lower price. We’re working to find a viable convergent solution. We think that, as part of this process, mobility is the key. Also fixed-mobile voice and broadband migration is working in our favour. When this happens, we’ll be better positioned than most of our competitors.”

Reaping the rewards

Mr. Reis describes the benefits of convergence as “huge”, noting that, “The first benefit that an operator gets from convergence is reduced OPEX. When you converge teams, you immediately eliminate inter-team redundancy, and also redundancy between equipment and systems.”

Convergence is crucial for Sonaecom’s development in terms of both reducing costs and attracting customers, especially corporate customers. By offering a completely convergent solution, corporate customers can integrate their fixed and mobile networks, receive the same high level of network security, and provide a seamless experience for employees. For example, an employee’s mobile phone can have a fixed tariff and number for the office, and then be used as a personal phone outside of work. Mr. Reis is highly satisfied with Sonaecom’s approach, “Our corporate and SME business has continued to see growth in both the fixed and mobile areas. This shows that corporate customers really value the benefits of these innovative solutions as well as our positioning.”

Bundling ≠ convergence

Mr. Reis warns that mixing convergence with pure bundling is a mistake, “Bundling usually means two services in the same invoice with a discount associated. I don’t think this approach creates real value for operators or vendors or even for customers.”

He believes that bundling should be avoided in favor of

6

Mr. Luís Filipe Reis, former Executive Director and COO of Sonaecom

Win-Win / JAN 2010

we would also give them unlimited traffic. We promised the same experience, the same broadband, and everything from the communication and marketing stand points. Customers didn’t notice any difference between fixed and mobile broadband.”

However, Sonaecom added two extra vital features that only mobile broadband can offer. The first was the very simple, plug-and-play mobile experience. With the support of Huawei, Sonaecom offered customers USB modems and produced software applications that would immediately install the product on a PC. In 2006, this was a major innovation. It was broadband, but it was broadband easy to install.

The second feature was that customers could “jump” with it. Mr. Reis recalls, “Our communication to promote Kanguru was focused on one single message–mobility. With Kanguru customers could get broadband everywhere, whenever they wanted.” This positioning proved to be a unique concept and an immediate hit with customers. As a result, Optimus still leads Portugal’s mobile broadband market.

Fat-pipe is good business

Many mobile operators are battling to move past being just a fat-pipe provider. However, Mr. Reis sees this as a futile effort as healthy profits can be made in the fat-pipe business: “If we’re a top broadband provider in terms of ease of use and installation, reliability, low latency, and service provision, customers are happy to pay.”

Mr. Reis also believes that operators do not have a large role in offering home customers specific services. “Obviously we offer some location based services, music clubs, and music downloads. Some services are quite successful, but the vast majority involve basic network access. Customers then get the services they want from YouTube, eBay, Facebook and so on. We see the service side as a big boy’s game; for example, provided by the likes of Apple, and Google with

7

convergence. “Convergence means finding new and better ways of serving customers, creating more value for them and, ultimately, ourselves. We have to create products and services that are really valued by customers and this should be the first step before moving forward.”

The mobile broadband innovator

Kanguru is a broadband wireless service launched by Optimus in June 2005, with which the company created a new product category. “In Portugal, even our competitors’ customers sometimes say they’re buying a “Kanguru” from Vodafone or TMN. Kanguru has become a generic name for mobile broadband because of this creative concept conceived by our marketing team,” Mr. Reis notes.

Leaping with Kanguru

Portugal’s mobile broadband market is mature, having attracted 2.69 million subscribers, compared with 1.7 million fixed broadband subscribers. Mr. Reis mentioned since Q1 2008 that mobile broadband subscriber numbers exceed fixed subscribers.

“In the mobile broadband area, we became–and still are–the market leader because of our innovative positioning, which customers fully perceive.” This positioning can be traced back to 2006, when Sonaecom launched European’s first 3G network with Huawei, and debuted the first 3G service in the country.

According to Mr. Reis, few people viewed mobile broadband as a meaningful challenger to ADSL in 2006. When it launched its HSPA service, Sonaecom positioned mobile broadband as if it was fixed broadband, which was a completely new strategy.

Sonaecom offered its customers “Just Broadband” at the same price as ADSL products. “We said to customers that if they received unlimited traffic and downloads from ADSL,

We’ve always been at the forefront of convergence technologically. We were the first operator to have introduced a full performance HSDPA network

in Portugal, and we again took the lead to launch HSPA+.

VOICEFROM OPERATORS

Win-Win / JAN 20108


proven to be invaluable, including IP backhauling and expanded RNC capacity.” To further solve the problem, Sonaecom is experimenting with new solutions, one of which involves extending fibre to almost all its BTSs and Node Bs. The operator will also test GPON as a backhaul solution to carry access traffic from Node Bs to the core network. As similar problems are now faced by other operators across Europe, Mr. Reis believes that Sonaecom’s field experience will help mitigate these problems on a large scale.

Keeping a technological edge

Sonaecom is known in Europe as an innovator positioned at the cutting-edge of technology. Mr. Reis notes that, “We were the first operator in Europe to use mobile broadband to compete with fixed broadband, and to do so successfully. We’ve always been at the forefront of convergence technologically. We were also the first European operator to select Huawei for such a deep level of cooperation.”

For Sonaecom, FTTH and LTE evolution is a natural progression, though new technologies bring risks as well as opportunities. FTTH and LTE have to be understood, and the learning process can be tough.

Sonaecom began its FTTH initiative in 2007, and had reached more than 150,000 homes by the first half of 2009. Mr. Reis regards the 2-year FTTH deployment experience as a steep but rewarding learning curve. “We’ve learned a lot over the past two years, and the experience has strengthened our home-networking technical capabilities. Today we’ve managed not only the technological side, but also the products, marketing, customer services and operations. So, we’re well prepared to move forward.” However, deployment costs still concern Sonaecom: “In the current financial climate, it’s unwise to deploy FTTH as a high CAPEX solution, so we’re looking for a more CAPEX-lite answer.”

To stay at the forefront of mobile evolution, Sonaecom is proactively preparing for beta tests with its vendors, including Huawei. “This shows we want to be top of the mobile technology game. We launched Portugal’s first commercial HSPA+ service in August, and we’ll quickly evolve to LTE because we need to give our customers the best experience they can get from their broadband connection.”

Sonaecom is the first operator to have commercially deployed Huawei’s 3G network in Europe, incorporating core network, access, radio, and terminal solutions. Mr. Reis praises the partnership: “We’re very pleased with our decision to select Huawei back in 2004 when you were not as big as you are today. We believe our partnership is more than a vendor/buyer relationship. It is a strategic alliance. We see Huawei as our long term partner.”

its Android product, and also terminal vendors. It’s not so suitable for operators.”

However, this is not the case when it comes to corporate customers. “For corporate and SME customers, we can be more creative and provide them with sophisticated services that they value, such as security network backups, IP Centrex, and IP trunking.”

Naturally, Sonaecom continuously seeks new killer services to which it can commit its resources. The company launched its Innovators Club a few years ago to supply communities with open APIs for innovators to produce applications. Though it was not massively successful, Sonaecom continues to actively search for software producers that are willing to trial new services and products in their network.

Staying at the forefront

“We’ve always been at the forefront of convergence technologically. We also want to be at the forefront of mobile technology. We were the first operator to have introduced a full performance HSDPA network in Portugal, and we again took the lead to launch HSPA+ in August 2009. We were also the first European operator to select Huawei for such a deep level of cooperation, and we are pleased with our decision.”

Solving the traffic ramp

“Traffic is growing not by double digits each quarter, but by triple digits. Obviously, we can use microwave or traditional circuits, but that is not a long-term answer that can accommodate the sustained, huge future growth,” Mr. Reis notes.

In addition to mobile broadband, Sonaecom has ADSL and GPON solutions. According to Sonaecom, customers’ fixed and mobile behaviour is identical; for example, YouTube usage, browsing, and video uploads. In fact, 90% of Sonaecom’s customers use Kanguru at home. From the customer’s perspective, they simply want a broadband connection. That is why Sonaecom has almost as many mobile broadband customers as fixed customers, and one of the main reasons explaining the huge traffic growth.

The triple-digit traffic increase has heaped pressure on Sonaecom’s network, including its radio access, transmission, RNC, and core network equipment. “I think the biggest challenge for an operator of our size is clearly site transmission, inter-site connection and RNCs,” Mr. Reis says.

Sonaecom rapidly upgraded its network capacity and transmission on site to relieve pressure on Node Bs and RNCs. “Several innovations launched by Huawei have

Win-Win / JAN 2010

VOICEFROM OPERATORS

Digicel bridging island communication

Since launch in 2001, Digicel has changed the communication landscape in many island regions and truly made a difference for island residents. Brian Finn, Group Commercial Director attributes the remarkable achievement to its commitment and understanding of the island markets.

he penetration of telecom services in island regions used to be comparatively low and access to basic telecom services remained relatively expensive due to less developed

telecommunication infrastructure. However, the entrance of Digicel has changed the landscape.

Having launched its first and flagship market in Jamaica in 2001, Digicel has promoted the mobile penetration in the country to rise from 4 percent in 2001 to 90 percent of the public in 2008, and similar dramatic improvement has also been seen in the many island markets scattering across the Caribbean, Central America and Pacific regions where Digicel assumes dominance. Brian Finn, Group Commercial Director attributes the remarkable

achievement to its commitment and understanding of the island markets.

Committed to island regions

WinWin: Digicel’s operation seems to be predominantly in island markets where other operators have tried and withdrawn. How did Digicel make continuous success in these island regions?

Mr. Finn: Our overall goal is to make mobile communications available and accessible to anyone, anywhere and at any time. We do this by ensuring that we stick to our commitment to deliver the best network, best service and best value to our customers day in, day out.

In terms of where we operate, with our launch eight and a half years ago in Jamaica, we brought mobile telephony to people who had never had it before. On day one, we brought down the cost of mobile handsets and calls by more than 40% making it possible for most Jamaicans to afford a mobile phone. As a result, mobile penetration there rose from 4 percent in 2001 to 90 percent of the public in 2008. Today, out of the total 2.8 million Jamaicans, almost 2 million subscribe to Digicel services, making Jamaica one of the most highly penetrated countries in the world.

It is this simple approach of best network, best service and best value that we have successfully replicated across

By Julia Yao

9

T

Win-Win / JAN 2010

It is this simple approach of best network, best service and best value that we have successfully replicated across the Caribbean, Central America and the Pacific. Currently, Digicel operates in 32 markets worldwide.

— Mr. Brian Finn, Digicel Group Commercial Director

10

Win-Win / JAN 201011

Digicel’s entrance in Haiti has had such a huge impact on the lives of Haitians that 7:00-10:00 p.m. is now referred to as “Family Time” because millions

of Haitians are taking advantage of Digicel’s off-peak rates to stay connected.

VOICEFROM OPERATORS

the Caribbean, Central America and the Pacific. Currently, Digicel operates in 32 markets worldwide and is proud to serve more than 10.3 million customers.

WinWin: What is Digicel’s business approach in those island regions?

Mr. Finn: Our strategy is to serve the underserved and our overall goal is to make mobile communications available and accessible to anyone, anywhere and at any time.

What that means in practical terms is that many of the markets where we operate either had no access to telecommunications–or very poor access courtesy of incumbent operator who kept prices high and lacked any ambition. Digicel prides itself on bringing competition to these markets and on being a monopoly breaker. Our approach has seen mobile phones and calling coming right down in price and people from every walk of life being able to own a phone–and benefit from owning a phone.

WinWin: In addition to fulfilling basic individual communications needs, how does Digicel exploit the enterprise market?

Mr. Finn: Having focused purely on mobile telephony in the majority of our markets, Digicel has recently begun to offer services to corporate customers in select markets–notably Jamaica and Trinidad & Tobago.

The Digicel approach to corporate customers is, as you would imagine, a very similar one to our consumer markets–namely, an absolute focus on and commitment to providing the best network, the best service and the best value.

In Jamaica for example, Digicel Business is delighting customers by reducing their communications spend by as much as half through the provision of a full range of

ICT fixed line services like voice, data VPN and Internet services through its fixed corporate WiMAX network–and, in the near future, will also be delivering business continuity services to companies through its state-of-the art Data Centre which was open for business in December 2009.

Making a difference

WinWin: It is commonly believed that in less developed regions, the capacity of mobile communications to change people’s lives is extremely high. Do you agree and does Digicel has any examples of this kind?

Mr. Finn: I absolutely agree. Haiti is a great example of where Digicel was able to deliver services that not only allowed people to communicate–but also to benefit and effect positive change in their lives.

When Digicel entered the market in 2006, only about five percent of Haitians had cell phones. Thanks to Digicel, mobile telephony is accessible to all. Today penetration stands at 40 percent. Coverage has also greatly improved, as Digicel made service available to more than 90 percent of the population.

In fact, Digicel’s entrance in Haiti has had such a huge impact on the lives of Haitians that 7:00-10:00 p.m. is now referred to as “Family Time” because millions of island residents are taking advantage of Digicel’s off-peak rates to stay connected with loved ones. And Digicel’s Motorola C115 handset is referred to as the “8 Million Phone” because it is accessible to the nation’s 8+ million residents (the handset retails for about 20 USD).

Digicel’s initial investment of 260 million USD was at the time–and remains today–the single largest investment


??????? key differentiation we are positioning ourselves in Singapore is hubbing. It has increased the number of services we sell in each household,

increased the revenue per household, enhanced customer loyalty and also reduced the costs for acquiring new customers.

made by an international company in Haiti. The company directly employs some 800 people in Haiti and indirectly has created 3000 additional jobs. Here’s what the former National Education Minister, Gabriel Bien-Aimé, had to say, “Since the launch of Digicel operations in Haiti, this dynamic company has revolutionized the telecommunication market. We are confident that the professional and social investments made in Haiti by Digicel will encourage other companies to follow in their footsteps.”

We are very proud of our achievements in Haiti. Today, we serve more than 2 million customers in Haiti and Digicel had a tremendous social and economic impact by making telecommunications services available to most of the island’s population.

WinWin: It seems that Digicel is extremely successful in Haiti. Could you introduce some of your unique services in Haitian market?

Mr. Finn: Digicel is recognized for its competitive rates, matchless coverage, superior customer service, an ample variety of products and services and state-of-the-art telephones. At launch, Digicel came with a number of firsts including free incoming calls, free activations and simple and ubiquitous ways to purchase top-up credit. The company has also made a number of telecommunications services for business available, including Blackberry services.

Scores of business people owe their success to the services Digicel provides, especially in areas where landlines were non-existent and or there was previously no mobile coverage. Today, shoeshine boys have mobile phones and can book appointments ahead of time to better manage their work days–likewise a Haitian mango merchant, Jean

Maurice Buteau, now exports 15,000 more mangoes a year because his trucks drivers can call for help when stranded on a rutted road so saving the cargo from spoiling and going to waste.

In 2008, Digicel launched two new services, Telefon Pa’w La, a public telephone service, and Rechaj Pap Padap, an electronic recharge service, allowing Haitian businesses to generate more revenues. The response to both of these products has been great, particularly in the case of Rechaj Pad Padap which, by allowing a minimum recharge of 10 Gourde as opposed to 50 Gourde (which is the minimum denomination on top-up cards), has resulted in more than 50% of Digicel recharge being done electronically through the Rechaj Pap Padap service.

WinWin: We notice that Jamaicans have an additional 2.5 million of their friends and families living abroad. How does Digicel cater to the communication needs of such a large group?

Mr. Finn: Jamaica is just one of our markets where there is a large Diaspora population living out of the country. Other Digicel markets with a significant Diaspora population–predominantly in the US, UK and Canada–would be El Salvador, Guyana, Haiti and Honduras.

In all, this adds up to some 10 million people from some of our key markets who live abroad and want to be able to connect with friends and family back home with ease and at an affordable price point. As such, Digicel offers a number of convenient ways for our Diaspora customers to communicate including online top-up, calling cards and retail top-up in over 100,000 locations across the US, UK and Canada.


Win-Win / JAN 2010Win-Win / JAN 2010

taking on ultra-broadband challenges with easeNew network technologies and the drive to improve the quality of user experience (QoE) are driving us towards the ultra-broadband era. It is estimated that 1000EB of data will be generated each year in this era. An ocean of information will fl ood networks, necessitating new approaches to network construction and operations. How can operators prepare for the challenges ahead?

By Xu Kun & Liu Shuqing

13

Tao of Business

ABC

Win-Win / JAN 2010

By Wang Kening & Ling Yun

14

ABC unveils three challenges

ltra-broadband is fundamentally changing the nature and structure of the broadband industr y, notably in terms of network infrastructure, services, O&M, and business

models.The surge in network traffic forces operators to

continuously expand and upgrade their networks, which in turn increases TCO. Mobile broadband and IPTV have emerged as expected services that incur high costs and yield stagnant ARPU growth. The ultra-broadband era will be characterized by higher network traffic levels and performance requirements, but decreased revenue per megabit of bandwidth.

Creating a business model that raises revenue, satisfi es bandwidth needs, and creates a climate in which ultra-broadband can thrive is one of the key issues facing operators today. Research by Huawei reveals that challenges in ultra-broadband operations can be summarized in the A (ARPU), B (Bandwidth) and C (Costs) curves, as shown in Fig. 1.

Curve A: fi nding new ARPU sources

A retrospective look at industry trends shows that rapid bandwidth growth has not only failed to boost ARPU, but has in fact narrowed the profit/cost gap. This pattern is exacerbated by P2P and video services; it is predicted that 18EB of data from Internet video will be generated each month in 2013, compared with 2EB from mobile data traffi c. Operators need to begin exploiting the commercial value of high bandwidth.

Finding a killer application is not so easy after IPTV and mobile broadband. Nevertheless, the Internet is a vast and fluid world with an almost unimaginable potential for personalized applications. Operators have to fi nd and

match ultra broadband applications with long tail markets that can create value and combat stagnant revenue growth.

Curve B: meeting bandwidth demands

High bandwidth is necessary to satisfy the surge in demand and enhance QoE for home users and enterprises. Annual network traffi c growth is exceeding even Moore’s Law, and network infrastructure–including nodes, ports, and architecture–must evolve to accommodate ultra-broadband services.

Operators face the challenge of involving their networks to accommodate ultra-broadband capability and services.

Curve C: reigning in costs

While ultra-broadband powers network evolution, network upgrades and expansion based solely on traffic causes TCO to skyrocket, which is untenable when coupled with low ARPU. Hence, operators need to reign in costs to raise the profi t margin.

Monetizing broadband

Th e charging mode in traditional broadband networks is unitary and mainly derives from home and enterprise users. If the ultra-broadband network follows this model, profi ts will remain low.

A new operating philosophy

Operators generally charge home users for broadband access and do not benefit from value-added services (VAS). However, the maturing HDTV industry chain is injecting energy into IPTV development and, when combined with an eff ective network operation model, will enable operators to build service aware and diff erentiated

U

Creating a business model that raises revenue, satisfi es bandwidth needs, and creates a climate in which ultra-broadband can thrive is one of the key issues

facing operators today.

Win-Win / JAN 2010

Fig. 1 Three challenges to ultra-broadband development

Voice Era HSI Era HDTV/MBB/Triple-Play Era Multi-Play Era

B How to keep the technology in line with bandwidth increase?

A How to generate new revenue?

C How to restrain the cost?

Post-Moore’s Growing

Sustainable MarginGood Margin

Worse Margin

Curve B: Bandwidth

Curve C: Cost

Curve A: ARPU

home service gateway integrates the server, STB, some access gateway functions, and it cooperates with the service delivery platform (SDP) to provide PC-style applications via TVs. Operators can build a service platform for third parties to provide VAS for home users, and thus engender an ecosystem of profitable long-tail applications.

Enterprise users generate revenue for operators mainly from private line connections. Operators’ role is mainly in providing bandwidth pipe and customer premise equipment (CPE), including the ONT, router and LAN switch. O&M is usually undertaken by the enterprise using expensive, specialist personnel. SMEs in particular would prefer operators to shoulder the O&M burden, and provide a range of services from private lines and ICT.

The service routing gateway (SRG) is vital for operators

networks. An increasingly open application market facilitates the development of myriad applications, which promotes differentiated operations and a long-tail strategy that can achieve success in the home user market.

The two major factors that impact IPTV QoE are channel zapping and picture quality. By storing groups of pictures (GOPs) for HDTV in a video engine near to users, sub-1-second channel zapping is possible and lost packets can be retransmitted to maximize QoE. The video engine can support customized applications such as time shifting TV and local ads.

The home gateway is set to be the cornerstone of long-tail value in the ultra-broadband era. The traditional home network usually comprises independent devices including the access gateway, server and set top box (STB). The

15

Tao of Business

Research by Huawei reveals that challenges in ultra-broadband operations can be summarized in the A (ARPU), B (Bandwidth) and C (Costs) curves.


Enhanced fiber backhaul and network capacity are set to simplify ultra-broadband network architecture from five to three layers; devices will be compact

and network architecture simpler.

to provide VAS and unlock their pipe provider chains. SRG functionally integrates the ONT, router, LAN switch, Wi-Fi, and firewall, while the network management system (NMS) centrally manages the system and provides O&M. Through a VAS service platform, operators can provide antivirus applications and launch ICT VAS. In doing so, they construct a mutually beneficial business relationship in which an operator provides the pipe and integrated services for enterprises in a much more holistic context.

Two new business models

Two additional business models can boost ARPU: service/bandwidth wholesale and digital advertising.

Service and bandwidth wholesale requires an open service and network platform to access a target market comprising SPs and CPs. Singapore, the UK, and Australia are examples of countries in which it is mandatory for operators to open their networks to third parties and offer wholesale services and bandwidth.

E2E service wholesale comprises three layers. First, the service layer; IMS and SDP enable the service wholesale, for example, online shopping, content markets, and virtual communities. Second, the backbone layer; the OTN enables the wholesale of Gigabit Ethernet. Third, the access layer; IP mobile backhaul via any media is wholesaled to compensate for the declining revenue of traditional TDM mobile backhaul.

The second model, digital advertising, inserts target ads into VOD programs, for which operators charge the agent or advertiser. In 2008 alone, network advertising formed a 50 billion USD global market. A wide subscriber base incorporating customer profiles and an E2E delivery platform positions operators as the natural facilitators of digital advertising, including network and IPTV ads. IPTV and SDP can open up new revenue sources and create an operating platform for advertisements. Internet content

can be introduced to TVs, and advertising revenues shared with CPs.

Target advertising depends on a powerful advertising platform that features an ultra-large database, user behavior analyzer, category management, and user information, including registration and behavior data. Target advertising will push local and targeted ads to the Internet and terminals, including IPTV and handsets.

Expanding bandwidth

Ultra-broadband will underpin FMC. In turn, networks must unify service bearing and deploy high-capacity nodes that are able to process and transmit huge amounts of data over long distances. IP+optical equipment will dominate various network nodes and layers, and this has catalyzed rapid progress in optical technologies–evolution from 40G to 100G has taken just two years.

Enhanced fiber backhaul and network capacity are set to simplify ultra-broadband network architecture from five to three layers; devices will be compact and network architecture simpler, as shown in Fig. 2.

The full-service ultra-broadband backbone network has extremely high capacity and reliability requirements. Router clustering on backbone nodes is inevitable and network ports that support 40 to 100Gbps will be gradually deployed. For optimum bearer and O&M efficiency, IP and optic convergence can fully utilize connection resources and the optical network’s high bandwidth.

IP routers will connect seamlessly with the OTN to deliver optically convergent architecture and enhance the backbone capacity, optimize traffic, lower costs, and raise reliability through dual-layer network protection.

The full-service ultra-broadband Metro Ethernet Network (MEN) embodies the largest E2E component


Tao of Business

of network architecture given the diversified technical so lut ions and network types . However, network deployment and O&M are complex and, due to the rapid development of mobile broadband and video services, the MEN must evolve from bearing triple-play to multi-play in order to achieve “one service edge, full service bearer”.

“One service edge” can be flexibly configured to manage and deliver all network services including fi xed/mobile broadband, IPTV and enterprise private line, and integrate VAS modules such as DPI and the fi rewall, which will greatly simplify MEN architecture and increase O&M effi ciency.

“Full service bearer” increases the OTN applications in the MEN that then cooperate with the IP layer to build a full-service ultra-broadband MEN. Based on one platform and supplemented by Layer 2 and 3 technologies, the network can deliver L2 VPN or L3 VPN depending on service features. Network bandwidth utilization can be optimized through unified full-service bearing after integrating an independent video processing module and mobile backhaul capability, such as 1588v2 and PWE3.

In terms of access, ultra-broadband will be spearheaded by 3G/LTE for mobile access and FTTx for fi xed access. The replacement of copper wire with optical fibers will accelerate, and xPON will be uniformly chosen for service access by home and enterprise users and also the base stations of mobile broadband networks. Greater bandwidth

demands require OLT to have TB capacity and the ability to smoothly evolve to 10G PON. Th e WDM PON and WDM at the access layer will further raise bandwidth for fi xed-line ultra-broadband access.

Reducing TCO

Network synergy lowers costs

Video streams, such as multicast and VOD, have a smaller convergence ratio than conventional Internet traffic. Video streams increase traffic in the MEN and backbone network, which bottlenecks bandwidth. The cost of traditional IP network expansion is prohibitive for operators, and multi-technology synergy is the only way to optimize network traffi c fl ow to lower deployment costs.

Firstly, the synergy between IP and optical networks can help optimize network traffi c fl ow.

The backbone network generally comprises an IP backbone and a WDM backbone. Traffi c fl ows hop by hop in a traditional IP+WDM backbone network, necessitating regular network expansion. Conversely, uniformly planned services at the optical and IP layers can redirect traffic via IP and OTN network synergy. Th e OTN constructs the shortest transport path and reduces the traffi c burden facing core routers, which removes the need for constant

Fig. 2 Ultra-broadband network architecture

Full service ultra BB backbone

Service delivery platform

CPE (Customer Premise Equipment)

UPE (User Provider Edge)

NPE (Network Provider Edge)

S-POP (Service-Point of Presence)

CR (Core Router)

OLT (Optical Line Terminal / CSG (Cell Site Gateway)

User terminal

10T/80T Cluster CR

T-Bit TSR/1M BRAS

T-Bit OLT/10G PON

100G LH DWDM

T-Bit OTN/WDM

WDM PON/CWDM

Full service ultra BB metro

Full service ultra BB access Converged OSS


network expansion. Multi-channel load balancing (MC-LB) provides dual-layer service protection to ensure backbone network reliability.

With an IP+OTN backbone, traffic flow and direction are optimized as traffic directly flows to the destination without hopping. Cross-connecting the OTN allows one port to connect in multiple directions, which cuts costs by 50%. Moreover, MC-LB in routers enables traffic routing in one direction via different paths. Multi-path protection is thus realized without backup links, reducing expenditure by 60%.

Secondly, the synergy between fixed and mobile networks optimizes mobile broadband traffic volume.

The cost of bandwidth in mobile broadband networks is higher than that in fixed networks. In traditional mobile backhaul, TDM leased lines exist between Node B and the RNC, which are inadequate for mobile broadband services. Several leading mobile operators have already built their own IP backhaul networks to reduce costs. An integrated operator can use its existing fixed broadband network to carry mobile backhaul traffic, which can reduce mobile backhaul costs by nearly 70%.

Thirdly, the synergy between storage and IP can leverage bandwidth from storage.

According to IBM, storage costs have been dropping at a weekly average of 3% over the past 25 years, much faster than the drop in bandwidth costs. This trend makes it feasible to leverage bandwidth from storage. For example, TV ratings comply with the Pareto principle in that 20% of programs attract 80% of the audience. Further studies reveal that 5% of on-demand programs attract 65% of all viewers and that storing these will reduce bandwidth usage by 65%. If the programs are stored in network nodes close to end users, bandwidth costs can be reduced dramatically. This model can also apply to IPTV multicast traffic and HDTV-generated unicast traffic, and thus bandwidth usage is huge. Caching IPTV GOP in the nodes near users reduces traffic, lowers bandwidth costs, and raises QoE.

User-centered operation reduces OPEX

The currently dominant O&M model mainly focuses on networks. O&M teams should adapt to the user-centered O&M model at the beginning of network design and transform their approaches in terms of installation, service delivery, testing, fault location, and service upgrades. Convergence management and visualized O&M are crucial to realizing user-centered O&M.

To realize efficiency gains in the All-IP era, ultra-broadband needs convergent management and visualized O&M. Convergent management would allow operators to unify the management of the access, backbone and transport networks and the MEN, achieve E2E service configuration, and simplify system architecture. Through a visualized O&M approach based on physical and logical links in the network, operators can achieve highly efficient O&M from E2E traffic monitoring, precision fault location, and intelligent network-wide alarm analysis.

Effective fault diagnosis tools are needed as the nature of video traffic obscures whether a fault has occurred in the bearer layer or service system. Analysis shows that 95% network failures occur on the last mile access network and MEN. The Huawei integrated fiber-copper line diagnosis system locates faults with optical fibers and copper wires in FTTx networks to within 6m and 1m respectively, and cuts the location time from minutes to seconds. The real-time IP network monitor tracks packet loss, delay and jitter on every channel and supports full-service monitoring, which can also be applied to third-party networks. With these two tools, operators can monitor IP network traffic in real time 24/7, thus achieving low TCO for IP networks.

Network synergy and user-centered operations can boost bandwidth ten-fold without raising TCO, thus realizing a sustainable and profitable ultra-broadband network.

Editor: Liu Zhonglin [email protected]

Network synergy and user-centered operations can boost bandwidth ten-fold without raising TCO, thus realizing a sustainable and profitable

ultra-broadband network.

Win-Win / JAN 2010

Perspective

19

By Bob Emmerson, European Editor of M2M Magazine

M2M: the Internet of 50 billion devicesMachine-to-Machine (M2M) communications is a healthy sector that’s expanding rapidly and generating significant revenues for mobile network operators (MNOs). Devices outnumber subscribers by an order of magnitude, but the term doesn’t do justice to the concept and the market it represents.

rose by any other name would smell as sweet (Shakespeare), but we really need a definition in order to convey the breadth and depth of the M2M concept. This one (edited slightly) comes

from Numerex: “M2M uses a device (sensor, meter, etc.) to capture

an ‘event’ (temperature, inventory level, etc.), which is relayed through a network (wireless, wired or hybrid) to an application (software program), that translates the captured event into meaningful information (e.g., items need to be restocked).”

There are many more devices than people so we are talking about an enormous market in which numerous opportunities are opening up for vendors, solution providers, systems integrators and MNOs. It’s opening up because M2M technology will increasingly underpin key areas of the economy, for example, the smart (green) grid, networked homes, healthcare in the home and transportation (usage-based auto insurance and the emergency eCall system for cars).

MNOs play a pivotal role Until recently most MNOs have taken an indirect,

albeit pivotal role in the value chain. Their networks transport the data traffic from the sensors to the back-office systems, i.e. they carry the bits. But M2M technology is moving into consumer sectors such as smart meters in the home, so the numbers shoot up and there is an emerging business case for a direct role and thereby a more profitable position in the value chain.

However, in order to be a direct player, MNOs need

a middleware platform, hence the recent partnership announcements between AT&T and Jasper Wireless, KPN and Jasper Wireless, and T-Mobile and Sierra Wireless. Vodafone has developed a platform, which it launched in July 2009, and both Orange and Telenor have their own platforms.

Migrating from being an indirect player to a direct player like Orange and Telenor will take time, so we can expect to see the process speeding up via acquisitions, e.g. platform vendors will be bought. MNOs also need systems integration resources to become a direct player in the enterprise space.

The value chain The M2M value chain is somewhat complex and a

typical solution can involve five or more vendors. Sensors are used to measure a particular parameter and they can operate independently, e.g. switch lights on and off and they can communicate directly with other sensors over short distances. However, an embedded module is normally used to transmit the measured data and in a wide-area wireless scenario the communications medium will be a cellular network.

Application software running on an M2M platform is then used to convert raw data into useful information. For example, the application might display the location of vehicles on a map or it could aggregate the input of tens of thousands of smart meters and transfer the result to a back office billing system.

There are numerous vertical applications and they broadly divide into six categories: Telematics/Fleet

A


humidity (5%-95%), shock, air pollution and congested wireless network traffic.

Firmware Over-the-Air (a technology that fixes device software remotely) is an interesting feature. In addition there are multiple interfaces that allow connection to other devices, voice and SMS services, and support for mainstream operating systems such as Windows 2000, XP, Vista and Linux.

The primary task of an embedded module is to convert analog sensor data into IP packets for transmission over a communications medium, e.g. GPRS or 3G. In addition there are intelligent wireless modules that allow part of the application to run in Java directly on the embedded baseband processor. For example, the application may send healthcare data at regular intervals, e.g. every 15 minutes, but if the measured parameter exceeds a pre-set limit then local intelligence will kick in and an alarm will be sent immediately.

Embedded SIMs

M2M SIMs have a smaller chip than those used for regular mobile communications. They are embedded in the device or on the wireless modules and they provide the identity of the networked devices (aka assets). They can be connected via a socket or be soldered to the printed circuit board. The environmental parameters for SIMs are the same as the modules, i.e. temperature range, vibration, humidity tolerance, etc.

SIM vendors as well as MNOs are working with ETSI and 3GPP on finalizing the specifications for a new form factor. A compromise of both removable and soldered solution is under study in order to address compatibility

Management; Consumer; Healthcare; Energy/Utilities; Security and Industrial/Building Control.

Self-powered sensors

Sensors need to be powered and batteries are often employed, but a technology known as energy harvesting takes the necessary power from its surroundings: for example, from linear motion, light, or differences in temperature. The amount of energy obtained in this way is enough to send a wireless signal a short distance (10 to 30 meters inside buildings) and perform a task, e.g. turn on a light. Efficient energy converters, ultra-low-power electronic circuitry and a reliable wireless protocol characterize the technology.

The EnOcean Alliance has created an open specification designed to ensure interoperability between self-powered sensors. The receivers/gateways are wired powered as they are constantly “awake” listening for traffic. EnOcean claims that self-powered sensors enable businesses to achieve savings up to 40% in energy and operating costs. To date components that employ this technology are in use in more than 100,000 buildings worldwide.

Embedded modules

Modules, both wireline and wireless, are normally embedded inside equipment and in many cases the environment will be severe. For example, Huawei’s EM700 3G embedded module, the world’ s first industrial strength M2M embedded module, has been designed to endure extreme conditions, such as temperatures ranging from -30°C to +75°C. It is also resistant to very high and low


Perspective

with both the existing SIM supply chain as well as automated pick and place systems.

In the future we are likely to have a product range that divides into three sectors: (1) consumer grade SIMs for regular applications; (2) reinforced SIMs for use in harder environments where removability, device compatibility and time to market are the decision drivers; and (3) industrial grade devices for use in extreme/harsh environments.

Middleware platforms

Middleware platforms establish a link between the network and companies’ business processes, thereby providing real time visibility and control to the customer. In a nutshell, the primary purpose is to give software developers an application view of the end-to-end M2M data, i.e. platforms remove the need to understand what is going on at bits and bytes level.

Middleware is basically a set of services; you can think of it as an M2M operating system, albeit a proprietary one right now. Functionality will typically include provisioning the devices, activating and deactivating SIMs remotely as well as routing, buffering, formatting and managing the M2M data flow.

MNOs can and have built their own platforms, but it represents a significant investment. Moreover it takes time and the market isn’t going to wait, hence the prognosis that we can expect more partnerships followed by acquisitions.

The platform may also have a graphical user interface that allows customers to see how their devices are performing and when relevant it provides detailed analysis of network behavior and makes sense of the data that has been collected at all levels of aggregation.

Wireless Logic provides a similar facility via a web portal known as SIMPRO that works alongside the company’s four main Virtual Private Networks (VPNs), which run over the networks of O2, Orange, T-Mobile and Vodafone. Functionality includes the ability to monitor, activate, and produce real-time data reports for all installed SIMs.

MNOs tapping the marketThe global M2M market is healthy and expanding, so

there are endless opportunities for all parties in the value chain. MNOs are particularly well placed since they play a pivotal role and they can maximize the opportunity without making additional infrastructure investments. However, there are underlying challenges that should be addressed, principally the need to look beyond their traditional business and operational models.

Cellular communications

M2M data can be communicated over any regular medium. Ethernet, for example, is employed in factory floor scenarios as well as Wi-Fi, but for wide area deployments cellular is the obvious preference, particularly those that are international and where the assets may be mobile.

Each module in a cellular deployment has an IP address. In future, when homes have smart utility meters, there will be millions of devices communicating with a central facility. And this is just one application. Thus, it’s clear that M2M is going to generate a tremendous amount of data traffic, which is why MNOs are getting serious about this space. However, there are issues.

In most applications there will be short bursts of data at regular short intervals. Therefore when a million and more devices are going on an off line to carry short bursts of data it becomes impractical to allocate IP address in the regular dynamic way. The overhead is far too high; therefore the devices are given a static address. This means that the data is transported over a secure VPN.

As more and more M2M applications are deployed around the world the number of communications-enabled devices will run into tens of billions. One widely quoted statistic is a figure of 50 billion devices by 2010 versus 6.5 billion people. Therefore MNOs will migrate to IPv6, which supports 2128 addresses, in order to accommodate tomorrow’s traffic.

As well as having a gigantic address space, IPv6 has additional features, one of which is network security. The Internet Protocol Security (IPsec) is integrated into the design of the IPv6 architecture and IPsec is mandated as a fundamental interoperability requirement.

Ubiquitous access and global connectivity

Cellular networks provide ubiquitous access and global connectivity, but MNOs are just one player–albeit an important one–in the value chain.

As indicated earlier, most MNOs have played an indirect role in the development of M2M applications; their role has been that of a bit pipe. The key link in the value chain is the middleware platform and the companies who have created a platform in order to provide a managed, secure, wireless data service.

These companies are often called Mobile Virtual Network Operators (MVNOs), but this term can be confusing. Regular MVNOs buy wholesale airtime from MNOs, which they use to retail competing services, mainly voice and SMS, to their subscribers. They are called MVNOs because they don’t own base stations, but their managed M2M services are not competitive. The business relationship is that of a partner and the M2M data services


they market generate additional revenue for the MNOs.Wyless is one such company, they operate in over

120 countries and therefore they refer to themselves as a “global network enabler”. Wireless Logic is another, they talk about “SIM aggregation”. In both cases they partner with Tier 1 MNOs in order to offer robust, secure access wherever and whenever it’s needed.

Note that this service involves establishing VPNs across the networks of different operators, establishing roaming agreements and negotiating local tariffs. This is the service that they offer to the application developers and in most cases the service is coupled to a middleware platform. Therefore the combination allows developers to focus on their core competence and the MNOs only have to deal with companies that understand data communications.

MVNEs: what are they?

An MVNE is a Mobile Virtual Network Enabler; it’s a company that provides infrastructure and services that enable M2M MVNOs to offer services to their end-user customers.

The key benefits are: lower CAPEX (shared platform); lower OPEX (shared resource poll); and quicker time to market (the requisite platform is in place).

Aspider Solutions is an MVNE that offers M2M enabling services to MVNOs. Key features include: real-time SIM card management, real-time cost control, fraud management and IP number management. However, MVNOs have full control and ownership of their SIM cards.

The p l a t fo rm can be enhanced wi th spec i f i c functionality, for example: fraud management; setting credit limits; ticketing system; tools for analyzing traffic; network monitoring; automated SIM ordering; and reporting. In addition there are comprehensive data collection and data handling services.

MVNOs use the platform to create their M2M solutions, but Aspider also offers value-add services. These include: verification/validation of GPS data; network initiated remote wake-up services for disconnected (un-ping-able) devices; enhanced roaming services with bearer testing and improved border crossing roaming algorithms for tracking and tracing applications.

Early bird MNOs

Telenor, the incumbent operator in Norway, runs its M2M activities via a separate company, Telenor Connextion, and more recently they created Telenor Objects, which is running an ambitious, forward-looking initiative.

Right now M2M solutions are running on proprietary

platforms, but Telenor Objects is predicting a shift from vertically integrated and closed solutions to a layered, open approach. The basic idea is to enable communications–between devices, systems and software applications–through a new infrastructure that employs Object Service Enablement Functions.

This new, open infrastructure would provide services and features common to many applications, thereby reducing complexity, development effort and maintenance costs. There would also be significant operating cost savings since the resulting managed service infrastructure could be shared across many independent applications.

However, the really big benefits would come from the ability to allow sensor information to be shared in a secure manner across any application and to allow any device to connect to any application. This means that new applications could be created on the basis of installed devices, i.e. there would be no need to keep on reinventing M2M wheels.

The va lue o f ob jec t networks would increase exponentially with the number of nodes. This is a variation of Metcalfe’s Law, which states that the value of a telecommunications network is proportional to the square of the number of connected users of the system. Telenor Objects expects this development to result in hyper growth when a critical mass is reached, which is what happened with the Internet.

Looking ahead

Although M2M represents a relatively small niche market within the telecommunications market, it hit the media headlines in 2009 following the smart grid announcements of the Obama administration and the resulting impact on the environment.

M2M also has the potential to address other key concerns, e.g. the fact that populations are aging and health care costs are rising. In addition to healthcare in the home, the industry has developed and implemented usage-based auto insurance solutions and the emergency eCall system for cars.

The niche is therefore set to grow significantly and as a result it will generate a huge amount of additional data traffic and thereby generate significant new revenue streams for the MNOs, even if they continue to play an indirect role. However, it is clear that the Tier 1 operators will move up the value chain in order to optimize the huge revenue opportunity. This development has started, one example being the partnership between AT&T and Jasper Wireless.

Editor: Yao Haifei [email protected]


Perspective

By Liu Nanjie

for future mobile broadbandThe industry unanimously agrees that a single wireless system cannot accommodate future

bandwidth and mobile functions. Future mobile systems invariably prioritize economical bandwidth provision comparable to fixed network, but with added ubiquity to enhance the end user QoE and drive the

information age. An ultra-broadband wireless system must integrate various wireless technologies, and the Three Clouds solution is no exception.

Three Clouds

Challenges facing mobile broadband

Business requirements and user experience

round 3 billion intelligent terminals will join 10 million telemetric terminals in accessing the mobile Internet over the next few years. This will see the current traffic levels generated by

5.5 billion phones skyrocket by, potentially, hundreds of times. Intelligent terminals will feature in various areas in the public domain, ranging from transport systems, vehicles, machine to machine (M2M) communication and logistics to education, healthcare, and security. In terms of entertainment and the home, they will underpin

recreational reading, online digital media entertainment (DME), pocket TV, and home appliance functionality and management.

The DME traffic currently represented by the iPhone is 35 times higher than that created by traditional terminals. Tremendous traffic volumes will arise with M2M access, increased digitization, and the continued migration of fixed users to mobile networks. The CAGR of mobile network traffic is destined to exceed 100% and will inevitably cause last mile bottlenecks.

User distribution is likely to remain skewed, with 5% of terminals in a given area generating 95% of traffic and revenues. If we draw a map for future mobile broadband traffic capacity, the capacity section covers the following features: large subscriber base, low mobility, high traffic and high revenues. Obviously, the capacity section is the

A


major revenue source and the network coverage focus. Future mobile broadband requires a QoE and capacity

similar to that of a fixed network, and that requires 2Mbps or 2Mbps/m2 bandwidth per mobile subscriber. Equally important are ubiquitous access and always broadband connection.

Technical capacity requirements

Enhancing broadband Internet QoE requires a future wireless frequency bandwidth of between 2Gbps and 2.4Gbps. Currently, only 300MHz and 400MHz are available for GSM, UMTS, CDMA, and LTE networks. As this is shared by different communication standards, only a bandwidth of 600 to 700Mbps is available according to the pace of technical development and Shannon’s Theorem, which defines an upper bound link capacity. Cellular technology alone cannot solve all mobile broadband problems.

Moreover, frequency bandwidth directly impacts coverage costs under the same communication standard. For example, a 2100MHz-based 3G network costs nearly three times more than a 700MHz-based 3G network. To meet mobile broadband requirements, the cost will increase in proportion to bandwidth consumption.

Future ultra-broadband mobile networks must balance the following as part of a feasible and holistic strategy: coverage, capacity, mobility, broadband performance, business model and costs. Cell and cell splitting models fail to meet these networking requirements, which forms the root of all the dilemmas facing wireless broadband and the single cellular system. Specifically, these are: obtaining globally unified, abundant and discontinuous spectrum resources; solving the lack of IP addresses; realizing self-organizing networks and terminals; achieving FMC; and reducing O&M costs from a level that can exceed traditional cellular networks by dozens of times.

The Three Clouds for future mobile broadband

The growth of terminals, services and bandwidth per capita has visited the mobile broadband system with more options. Before the problems with indoor bandwidth were exposed, many technologies seemed to meet service requirements. Solutions incorporating multiple technologies have since been developed to meet current indoor bandwidth requirements and still be profitable. Research indicates that all future mobile broadband solutions will be based on networks that combine coverage, capacity, and backhaul clouds.

Fig. 1 shows the structure of the Three Clouds solution. Bandwidth negates mobility or vice versa, and the gap between the two creates new mobile access needs. New nomadic or local wireless broadband requirements create the capacity cloud based on the coverage cloud of the traditional cellular system. Wireless capacity framed by FMC creates a backhaul cloud capable of supporting the large volumes of traffic that a coverage cloud is unable to process.

The first cloud: coverage cloud

The coverage cloud comprises a traditional wireless cellular technical system that includes GSM, UMTS, CDMA, and LTE networks, and which is technically and commercially mature with increased cellular speed. This cloud is designed to solve legacy public land mobile network (PLMN) problems. Cellular networks fundamentally lack compatibility with future Internet services, are unable to provide economical bandwidth on a par with fixed networks, and fail when faced with high capacity Internet applications.

Before the problems with indoor bandwidth were exposed, many technologies seemed to meet service requirements. Solutions incorporating

multiple technologies have since been developed to meet current indoor bandwidth requirements and still be profitable.


Perspective

Although cel l-splitt ing raises bandwidth when broadband capacity increases, it also drives up costs and degrades performance. Given this, cellular technology suits mobile coverage and the coverage cloud is only responsible for horizontal handover (HHO). Under multi-wireless and multi-frequency architecture, the key rests with identifying a complementary capacity cloud that supports high bandwidth, low mobility, and the FMC convergence point. The coverage cloud must solve various issues related to vertical handover (VHO) with the capacity cloud, link prediction, scheduling, resource allocation, QoE and FMC.

The second cloud: capacity cloud

In a structure that is fundamental to realizing FMC-2M, the capacity cloud integrates mobile cells, carrier-class Wi-Fi, Mesh, Ad-Hoc, Relay and Metro, and various access technologies. The capacity cloud is essential for FMC, ubiquitous access, always broadband connection, and the digital enterprise and digital home functions.

This cloud supports high-density indoor coverage, carrier-class high-capacity relay network, and lossless IP multimedia bearer layer. Between 50m and 100m, the capacity cloud attracts large number of wireless devices, bandwidth-hungry services and multimedia streams. This increases demands on the smooth interfaces between fixed and mobile networks, carrier-class Wi-Fi, Meshing, multi-radio/multi-frequency, high-density IP addresses, IP service overloading, bandwidth per user, and traffic streams.

Carrier-class Wi-Fi is essential to fuel the capacity cloud. Operating at 2.4GHz and 5.8GHz and occupying two or more adjacent 20MHz channels, mature 802.11n technology provides a bandwidth higher than 300Mbps and its highly efficient MAC suits IP and Internet applications. The capacity cloud vastly outperforms other technical systems in terms of QoE, predictable throughput coverage, and reliability. Notably, it is comparable to fixed-line broadband when downloading large files and

processing overloading symmetry services. With a similar trend seen in physical level technological

developments, future mobile broadband systems must integrate different frequencies and link-layer protocols to boost network efficiency and raise frequency space. As the average throughput supporting high IP traffic loads and a good Internet experience will be 30 times higher than current levels, high link efficiency and wireless overload controls are required to ensure throughput, reliability, forecasting and compatibility. As the present cellular standard lacks these functions, challenges are also raised for LTE.

As 95% of the services begin and end in the capacity cloud, the marriage of various profit and business models is closely connected to the efficiency and transparency of the capacity cloud. In this sense, the cloud must viably balance the interplay of technology and business strategies.

The third cloud: backhaul cloud

The capacity cloud stimulates a need for the backhaul cloud. If locally dynamic high-bandwidth requirements are addressed by the capacity cloud, how can its capacity be infused into a network? A dynamic, mobile network structure for bearing the network capacity must exist between the capacity cloud and backhaul–the backhaul cloud. While it is not a backhaul, access or transmission network, the backhaul cloud must be compatible with the capacity cloud and seamlessly connect with it. Backhaul problems tend to arise during the early stage of mobile broadband development.

In the past, we planned wireless systems, such as 3G/HSPA, by extending the voice model, which gave rise to backhaul bottlenecks. The backhaul structure must feature a high-capacity two-way transmission capability, smoothly connect with the capacity cloud, adapt dynamically to the network, and maintain wireless features. It must also enable VHO between the capacity cloud and the coverage

Three Clouds architecture will enable mobile broadband to be truly open and ubiquitous, thereby ameliorating the last mile problems related to broadband,

mobility, control and ubiquitous access. In the future, the consumption of any message will be covered by a certain combination of the Three Clouds.


Fig. 1 Structure of the Three Clouds for future mobile broadband

Indoor coverage + traffi c VHO

IP backhaul

High capacity backhaul

HHO

Backhaul triangle

IP backhaul

Coverage cloud comprises a traditional wireless system that includes GSM, UMTS, CDMA, and LTE, and which is technically and commercially mature with increased cellular speed. This cloud is designed to solve PLMN problems.

Backhaul cloud is the hybrid backhaul solution for FMC, which is designed to solve problems like dynamic topology confi guration, load balancing, economical networking, low-cost maintenance, and resource allocation.

Capacity cloud• All-IP and high-density IP solutions (predicable, MP etc.)• IP QoS guarantees and always broadband connections• IP resource allocation and maintenance cost management• Frequency strategy and meeting M2M needs• Terminals and AP/RNC management• VHO and switch between capacity and coverage

cloud, possess transmission and access features, and match heavyweight IP network and capacity requirements.

While over ten technologies suitable for the backhaul cloud exist, none meets all of the above requirements. Coupled with the fact that both the IT and CT camps lack a clear strategy on spectrum development, realizing the backhaul cloud is the vaguest of the three clouds and thus the one that off ers the greatest potential.

Spectrum strategies

Attracted by the huge market potential brought about by the cyber world, many non-traditional service providers, including Google, Microsoft and Broadcom, are now competing for spectrum. Th e spectrum strategies of newcomers are focused on spectrum resources required by white spaces, the capacity cloud, and the backhaul cloud. The spectrum area comprises both IT and CT players, all of whom are eyeing the availability, cost, and service feasibility of the spectrum.

Concentrating on the white space and capacity cloud, IT manufacturers are seeking to dominate the wireless broadband spectrum that yields the highest returns. IT enterprises–such as Microsoft, Broadcom and HP–occupy the most valuable 300 to 400MHz band, which is either lower than 700MHz or higher than 2.1GHz. Traditional PLMN camps focus on the 700 to 2100MHz spectrum, and are neglecting new resource development. New resources, however, enable the IMT to create clean

spectrum space that meets service requirements.Microsoft proposed its WhiteFi network solution in

October 2009. Based on UHF white space, the WhiteFi solution resembles Wi-Fi, though its essential difference is that it operates at the 700MHz digital dividend. The WhiteFi solution integrates a new adaptive spectrum allocation algorithm that processes spectrum changes and segments through an unused TV band and employs a low-cost protocol that effectively handles temporary changes by auto-confi guring to the acquired white space. Th e white space provides the best remote connection in rural areas and supplements network coverage in urban areas.

All terminals will integrate Wi-Fi in the future, and Wi-Fi will be ubiquitous. As a natural extension of Wi-Fi, the backhaul cloud integrates Metro Ethernet, Wi-Fi, WiMAX and other technologies. The defects caused by independent Wi-Fi networking can be compensated by the transmission, connection and control functions of the backhaul cloud and the continual coverage and HHO of GSM, UMTS, CDMA, and LTE networks. Currently, increasing number of 3G+ solutions integrate VHO and FMC capabilities.

Th ree Clouds architecture will enable mobile broadband to be truly open and ubiquitous, thereby improving the last mile problems related to broadband, mobility, control and ubiquitous access. In the future, the consumption of any message will be covered by a certain combination of the Th ree Clouds. In this combination, each cloud is indispensable.

Editor: Li Xuefeng [email protected]

Coverage cloud

Backhaul cloud

Capacity cloud

Winners

Win-Win / JAN 2010

“An Intelligent Nation, A Global City, Powered by Infocomm” describes the vision of Singapore’s Intelligent Nation 2015 Plan (iN2015), and exemplifies the smart country’s wisdom and commitment in telecommunications.

By Yang Weimin Editor: Pan Tao [email protected]

powered by smart communications

27

Singapore

Win-Win / JAN 2010

ne of the major economic powerhouses and logistics hubs in the Asia Pacific region, Singapore has a top-ranking broadband penetration rate and lower

tariffs for fixed, mobile and broadband Internet services.

Since the launch of the iN2015 plan in 2006, their communications industry has grown in importance to become a mainstay and driver of the nation’s economic growth. Many businesses have dramatically reduced operating costs and outpaced the global financial crisis by virtue of new communication technologies and a rich set of information services.

Citing this success, the Infocomm Development Authority (IDA) of Singapore, long a champion of the infocomm industry provides us the following statistics for 2008:

Boosted by the iN2015 plan, the revenue of the infocomm industry grew 12.4% to reach 58.1 billion SGD (around 41.7 billion USD).

Infocomm export market continues to account for a greater portion of overall industry revenue, at 61% to hit 35.44 billion SGD (around 25.4 billion USD).

The number of infocomm manpower employed increased by 6.6% to reach 139,000.

90% of the nation’s businesses that employ 200 or more people have their own websites, with an Internet penetration rate of 100% and 94% of the families with children own at least one computer.

The s ec re t to the i r succe s s l i e s beh ind innovative and progressive thinking by Singapore’s communications industry and the government.

Strong government supportThere are 40 telecom equipment vendors and

over 1,000 telecom service providers even though Singapore is small with a land area of only 700 km2, and a population of 4 million.

Benefiting from the government’s telecom regulation policy that encourages free competition, the telecom market has long thrived on a level playing field for both small- and medium-sized companies.

Remarkably, as the “government’s chie f information officer (CIO)”, the IDA is playing a leading role in promoting the nation’s infocomm industry and technological advancement. It remains committed to creating a sound business environment and encouraging fair and effective

competition in the telecom industry. The iN2015 plan beginning in 2006 seeks to

extend the infocomm’s reach to various sectors. Its objectives are to double the value-add of the infocomm industry, triple its export revenue and create 80,000 new jobs among others.

As part of the infrastructure under the iN2015 plan, the Next Generation Nationwide Broadband Network (Next Gen NBN) will support all of the nation’s existing and future information communication services, including voice, high-speed broadband Internet access, IPTV, video on demand (VOD), enterprise private lines and mobile broadband services.

The government has invested 1 billion SGD (around 719 million USD) in the Next Gen NBN, Singapore’s national information highway, hoping to get every household passed and achieve fiber to home (FTTH) with 100Mbps for individuals and 1Gbps for enterprises. So far, the Next Gen NBN has covered 60% of Singapore’s territory and will increase its coverage to 95% by June 2012, putting an end to any digital divide.

Leading with broadband services

As the world’s first open access FTTH network, the Next Gen NBN project provides a good example for next-generation networks, open fiber access, transition of fixed networks to All-IP networking and ICT/FMC applications. The project has received wide attention from across the industry chain since its launch in 2006.

In April 2009, after three years of competitive bidding and bid evaluation, StarHub was selected to establish the Operating Company of the Next Gen NBN. Incorporated on 14 April 2009, Nucleus Connect is responsible for designing, building and operating the active infrastructure of the network. It will offer comprehensive and flexible services that will help Retail Service Providers select and deliver broadband connectivity services to their target markets quickly and seamlessly, bringing a more enriching experience to the end users.

As Singapore’s second largest telecom operator, StarHub is also the only operator that can provide individuals and enterprises with a full range of services that span information, communications, and entertainment over fixed, cable TV, mobile

O

28

Winners

Win-Win / JAN 2010

networks and Internet. In recent years, StarHub has been growing fast

and getting more market share, especially after its launch of the country’s first 3G Femtocell-based Home Zone service that is highly competitive in terms of performance, price, and technology. For households that use a combination of StarHub’s mobile communications and fixed broadband services, Home Zone offers an integrated and unified solution that facilitates subscribers’ usage and increases the operator’s differentiated competitiveness in Singapore’s hot telecom market.

Oriented toward fi xed and mobile convergence, the Next Gen NBN is to carry all of StarHub’s broadband services and possibly even broadband services from other operators across the nation in the future.

StarHub has attached high importance to network bearer and evolution capabilities and service bearer quality since the outset of network planning. To guarantee a successful launch of services and shorten the time to market, StarHub gives priority to a vendors’ delivery capability. After rigorous service and technology evaluation among leading vendors, StarHub fi nally selected Huawei’s All-IP network solution, a solution combined with unified network management, FMC bearer, and EOT service capabilities to optimally match StarHub’s Next Gen NBN requirements.

Notably, the MPLS HQoS technology unique to Huawei routers adapts well to business scenarios for wholesale services. By assuring bandwidth quality for every enterprise’s VPN on the backbone network, the solution has largely revolutionized enterprise VPN services, helping StarHub deliver quality private line services for enterprises and attract high-value customers such as banks.

Huawei’s unique MPLS HQoS feature is

exactly what we want, commented a StarHub expert. Th e feature provides a holistic mechanism for QoS scheduling. In addition to five-level HQoS scheduling that meets the varied access requirements of various users, the mechanism supports MPLS HQoS for networking that provides QoS capabilities for services, such as MPLS-based point-to-point and multipoint-to-multipoint private line and circuit emulations services. Combined with traffic engineering and bandwidth constraint capabilities, the solution can guarantee QoS for the Next Gen NBN bearer and improve network resource allocation.

With flexible L2/L3 capabilities, the solution also helps StarHub deploy and operate the Next Gen NBN smoothly, enabling StarHub to adopt L2 or L3 technology depending on various service requirements. For example, L2 solutions apply to high-speed Internet access for individuals, while L3 solutions suit IPTV/VOD/VPN applications. These solutions are more efficient, reliable, and cost-effective than units where all services are carried at L2 or L3 only. In addition to supporting and fully reusing existing services and equipment, these solutions can support high-bandwidth applications like broadband videos, enterprise VPN lines, and mobile broadband services. Expansion is smooth, reducing service downtime during cutover and upgrade, with improved user experience, satisfaction and loyalty.

The massive construction of this national broadband network tests operators in terms of operational savvy and prowess. From the beginning of the Next Gen NBN project, Huawei has focused on addressing StarHub’s concerns, understanding and responding proactively to its core requirements, designing a business model with the operator and customizing a solution for the operator. Th is

Inspired by the success of Singapore’s Next Gen NBN project, Malaysia’s HSBB, Australia’s NBN, and New Zealand’s NBN projects are all gathering speed, especially under the spur of the fi nancial crisis.

29

Win-Win / JAN 2010

has laid a solid foundation for Huawei to fully accommodate StarHub’s requirements in terms of the business model, roadmap, technical indices, delivery, and service in later stages of the project. In the next few years, Huawei and StarHub will join forces to complete the Next Gen NBN project.

Growing through innovation

Singapore has been devoted to building an innovation-oriented knowledge economy and attaining the same goal for communications development, be it network architecture or services.

In terms of network architecture, Singapore’s Next Gen NBN is the world’s first national broadband network based on open access architecture. As stipulated by the Singaporean government, the Next Gen NBN value chain at different layers will be separate from one another. In other words, passive infrastructure providers, active equipment operators and retail service providers all operate independently from one another to preclude monopoly or unfair competition. This has reshaped the vertical operation model which is traditionally adopted for the industry. Coupled with other regulatory requirements for operators, such as the obligations of a government-set price and universal service, the government expects to create a fair and efficient platform, which grants any competitive service provider access to the market at an appropriate price so that they can invest in service and application innovations. This is also a key enabler in boosting competition and vitalizing the retail service market.

In terms of services, the government has launched more than 1,600 online government

services available to Singaporeans 24/7 by working closely with the telecom industry. This has greatly saved the time and resources for Singaporean residents to interact with the government. Take online licensing for example. The service includes 71 business licenses for enterprises from 19 government departments. For example, 80% of the nation’s residents who want to start a business are able to apply for a license online anytime, anywhere and the average processing time has been shortened from 21 to 8 days.

All Singaporeans, including the elderly, the disabled, the poor and the less-educated, will be given access to a broad range of services by 2010. These services include high-definition videoconferencing, remote medical treatment and education, and random grid computing. As part of the initiative, the NEU PC Plus Programme supports low-income household with school-going children to own a brand new computer bundled with software and Internet access at an affordable price. So far, the project has benefited more than 7,000 low-income households with school-going children.

It is the Singaporean government’s vision to boost the economy, create benefits for residents, and strengthen their position as a major hub in the Asia-Pacific region through enhanced communications. This vision is gradually coming true as the iN2015 plan bears more and more fruit in Singapore. In addition, the plan has served as a showcase for neighboring countries.

Inspired by the success of Singapore’s Next Gen NBN project, Malaysia’s HSBB, Australia’s NBN, and New Zealand’s NBN projects are all gathering speed, especially under the spur of the financial crisis.

30

Winners


MegaFonBy Liu Dong Editor: Xue Hua [email protected]

moves with IP confidenceIn response to the global financial crisis, Russia’s MegaFon has expanded its business prudently by starting with delivering high-quality mobile network coverage across Russia. By focusing on 3G services and introducing IP technologies, the operator seeks to explore multi-service operation models and move toward FMC operations.


he mobile penetration rate in Russia hits an impressive 130% during 2008 with 188 million subscriptions. MTS, VimpelCom, and MegaFon currently

dominate the highly competitive Russian and CIS regions, with the rest of the market carved up among ten smaller operators.

Expansion in crisisRussia was hit hard by the economic slump.

Falling subscriber spending and lackluster growth has meant a shaky year for operators who have been forced to look for new ways to keep afl oat.

Despite the high overall penetration rate, mobile coverage in Russia varies widely due to the country’s imposing size. Although key cities such as Moscow and St. Petersburg have a mobile penetration rate averaging 150%, network coverage thins in tandem with population density, especially in Siberia and the Russian Far East, which lies between Lake Baikal in central Siberia and the Pacific Ocean. Achieving wide coverage in such areas with conventionally constructed base stations and backhaul networks is hindered by complex and costly deployment and OAM scenarios, which in turn yields low returns.

While 3G services were introduced in Russia relatively early, progress has been slow due to insufficient transmission bandwidth. To fully exploit the potential of 3G services and meet demand, operators have to increase the transmission bandwidth of the backhaul network from an average of 1 E1 to more than 8 E1s. If

they stick with traditional technologies, backhaul construction and maintenance costs will skyrocket and narrow the profi t gap derived from fl at rate 3G mobile broadband services, which may ultimately cripple mass 3G service deployment.

To offset the negative impacts of the financial crisis, many mobile operators are eager to expand their networks and market reach through FMC services. Th ose with fi nancial muscle are snapping up the smaller fi xed network operators in the hope of fi nding a shortcut to FMC operations, though doing so is fraught with risk. Heavy investment, the complexity of realizing a unifi ed and converged network, and poor network infrastructures combine to obscure the payback timeframe to the distant future.

Moreover, operators are burdened with the decision of whether to stick with traditional technologies or radical ly change direction. MegaFon, however, decided to take a balanced and progressive approach.

Progressively promoting coverage and service

Mobile backhaul is a priority issue in the plethora of technological challenges facing mobile operators. As the highways of the communications’ map, bearer technologies connect a massive amount of BTS equipment. An easily manageable, low-CAPEX backhaul network that provides high bandwidth is vital to delivering decent coverage and services.

T

MegaFon’s IP-based network evolution has allowed the company to both eye FMC far more confi dently and also expand during the fi nancial downturn, in part due to lowered CAPEX and OPEX.

MegaFon’s IP-based network evolution has allowed the company to both eye FMC far more confi dently and MegaFon’s IP-based network evolution has allowed the company to both eye FMC far more confi dently and also expand during the fi nancial downturn, in part due

Winners

Win-Win / JAN 2010

Optical fi bers fail to cover Russia’s BTSs, meaning that mobile services continue to wrestle with the high cost of backhaul networks and diffi cult OAM conditions.

Optical fibers fail to cover Russia’s BTSs, meaning that mobile services continue to wrestle with the high cost of backhaul networks and difficult OAM conditions. However, a strong IP solution can cut investment requirements and bypass bandwidth, transmission and scalability bottlenecks.

Expanding coverage

Founded in 1993 in St. Petersburg, MegaFon has grown from humble beginnings into one of Russia’s top three operators. Its success is attributable to its emphasis on enhancing customer service while achieving ubiquitous wireless coverage. Most operators have strategically avoided the sparsely populated and environmentally hostile regions of the Russian Far East and Siberia, though, as a relative latecomer in the mobile arena, MegaFon entered the market knowing it had to diff erentiate itself and provide full service coverage to attract customers.

The operator’s lack of fixed network resources created space for a more flexible and accelerated network plan that reached beyond traditional backhaul network technologies to a network-wide IP solution. Th orough analyses and planning led MegaFon to select Huawei’s IP backhaul technologies.

Unlike traditional PDH/SDH/ATM-based mobile backhaul network solutions, the Huawei IP Backhaul solution was able to greatly increase coverage in the Far East and Siberia without

signifi cantly increasing costs. Th e solution provides a range of interfaces to accommodate all service types through a single transmission system. The utilization of site and transmission resources is maximized as transmission is possible across optical fibers, microwave, and DSL lines. This reduces BTS reliance on either scarce fiber resources or complicated microwave planning by allowing transmission across a broader range of media.

The Huawei solution incorporates advanced OAM technology with visual network management, service provisioning and troubleshooting to minimize and simplify the manual maintenance burden. It has extended access to previously unreachable BTSs to send radio signals over Siberia’s expansive landmass. In Russian, the word “mega” translates as public; now, MegaFon is truly living up to its name thanks to a network reach that covers the masses. Not only does this benefi t the Russian people, but the large-scale deployment of the Huawei IP solution has enabled the operator to weather the economic storm and consolidate its leading market position.

Bringing 3G services home

In addition to the nation’s more remote regions, MegaFon’s ambitions to popularize 3G services in major hubs such as Moscow and St. Petersburg were restricted by the insufficient bandwidth of fered by t radi t ional backhaul networks . Multiplying the linear capacity of a traditional backhaul network was not feasible, as this would

Optical fi bers fail to cover Russia’s BTSs, meaning that Optical fi bers fail to cover Russia’s BTSs, meaning that mobile services continue to wrestle with the high cost of backhaul networks and diffi cult OAM conditions.

33


have led to a corresponding rise in overall costs. If coupled with a non-traffic-based charging policy for 3G services, bandwidth costs will invariably outpace service revenues. Again, MegaFon turned to IP technology for its bearer solution. For roughly the same cost as a traditional solution, IP-based statistical multiplexing and mature, inexpensive Ethernet ports have increased mobile backhaul bandwidth by over a 1,000 times for Russia’s major cities. Fast-speed and innovative 3G services became so popular that MegaFon even revived the 3G terminal market as shoppers’ regained confidence in 3G services.

Looking forward to FMC

Despite being the fastest approach to FMC, MegaFon opted against acquiring a fixed network operator, believing that the risks and uncertainties far outweigh the potential gains. Instead, it chose to evolve progressively toward FMC. Rather than radically replacing its bearer network, MegaFon adopted the Huawei IP backhaul solution for a progressive approach. Employing unified PWE3 technology to carry and adapt to all service features through the same MPLS LSP, the IP backhaul supports new services through interface adaptation. Advanced IP backhaul technology provides enterprises located near BTSs with private fixed line services over a high-quality mobile backhaul network, which has boosted QoS guarantees and more efficiently exploited the potential of fixed business in the high-value enterprise

market. Doing so has also extended the operator’s FMC experience, setting the stage for home fixed line deployment on a massive scale. While other operators are struggling to recoup returns from costly acquisitions, MegaFon is already implementing its FMC plan.

Moving far with the right choices

Since becoming the first Russian operator to adopt IP backhaul on a large scale in 2007, MegaFon has constructed its mobile IP backhaul network on a huge scale. In retrospect, its approach has proven to be correct; IP-based network evolution has allowed the company to both eye FMC far more confidently and also expand during the financial downturn, in part due to lowered CAPEX and OPEX.

Currently, MegaFon provides the widest wireless coverage and broadest range of 3G services in Russia. The company has the highest 3G brand equity and the highest nationwide VAS ARPU at $2.3. Serving 23% of Russia’s mobile subscribers, MegaFon has the third largest market share and ranks first in terms of revenue growth at 28% and new subscriber growth at 22% in 2008. An independent audit for 2009 testifies to the company’s healthy financial shape despite the recession, which is allowing the operator to focus on nascent technologies, such as LTE, and plan its expansion overseas.

Winners


China Telecom Shaanxi

By Song Zhuoze Editor: Li Xuefeng [email protected]

gears up for exaflood of trafficIn response to the pressures from surging traffic and network optimization, China Telecom Shaanxi has developed and implemented a whole set of solutions to deal with explosive bandwidth growth from IP backbone to metro core, and from back-to-back to 2+4 clustering. These solutions have led to the successful deployment of a future-proof network with a super-large capacity.


Traffic boom sparked by information

s an important cradle for the Chinese civilization, the province of Shaanxi in northwestern China is noted for its long history and in particular,

its capital city of Xi’an, which served as a ruling seat for 13 Chinese dynasties. Benefiting from a flourishing tourism industry, Shaanxi has emerged as a regional economic center and the nation’s third largest scientific research center, driving the rapid development of ICT.

On June 17, 2009, China Telecom and the provincial government of Shaanxi entered into a long-term strategic cooperation agreement, which provided for an investment of about 3 billion USD over the next five years for improving and upgrading the ICT infrastructure across the province. China Telecom Shaanxi is the region’s leading operator in terms of size, competency, and technology, delivering voice, data, video, multimedia, and information services over its fixed and CDMA networks.

China Telecom Shaanxi i s expanding its range and scope of information services and moving toward offering a full line of integrated services for individuals, households, government agencies, and enterprises. Also, new services like videoconferencing, HD IPTV and P2P service are hot and fueling a surge in IP traffic.

China Telecom Shaanxi predicts that by the end of 2010, the demand for fixed broadband bandwidth per subscriber will reach 18Mbps or higher. In mobile communications, the downlink bandwidth per subscriber is forecast to increase from 153.6Kbps to 100Mbps during the evolution from 2G to LTE to keep up with burgeoning mobile broadband services. As network bandwidth demands are growing exponentially, it is vital for

the operator to continuously boost its bandwidth capacity to deliver a full range of services and improve service quality.

Router clustering creates high valueResponding to IP backbone network pressures

As one of China Telecom’s eight IP core backbone nodes, China Telecom Shaanxi’s IP backbone network carries network-wide service traffic across Shaanxi as well as the IP data traffic for six western provinces. It has become a top priority for China Telecom Shaanxi to increase its IP backbone network’s capacity and bandwidth to handle the unabated surge in traffic.

There were four solutions available for the expansion: 1) adding more slots in a single router frame; 2) increasing a router’s single port capacity; 3) interconnecting multiple routers; and 4) router clustering. The operator compared them meticulously to decide what would best meet its requirements.

The operator found that the first two solutions would result in insufficient smooth capacity expansion and were probably a waste of investment due to limitations related to single-router physical components, micro-strip processing technology, power consumption, and cross-talk. Given that the current IP network infrastructure is fully upgraded every two years, limited equipment scalability may mean high construction and maintenance costs for the operator. Increasing the capacity of a single device provides only a stopgap. More importantly, the operator needed a sustainable solution to overcome technical barriers.

The expansion solution by interconnecting multiple routers can be considered for CAPEX

A

Winners

Win-Win / JAN 2010

To ensure the quality of bandwidth-hungry services, China Telecom Shaanxi decided to upgrade its back-to-back router cluster that had been operating stably so that it could operate at up to 5Tbps.

reduction. It can moderately ease the traffic but may also create more problems, such as increased overload for interconnection links, more IP addresses, more routing table entries, and diffi culty in traffic balancing. Moreover, the solution may complicate the network structure and make maintenance more difficult. So China Telecom Shaanxi abandoned this solution.

Th en the operator looked to router clustering, an optimal solution to increase backbone network equipment’s port capacity and its capabilities of data forwarding, route convergence, and smooth expansion. Tang Hong, director of the Datacom Department, China Telecom’s Guangdong Research Institute, commented: “According to China Telecom’s traffi c forecast model, the current routing devices can barely meet growing subscriber requirements. We see a promising future for core routers in clustering.” Finally, China Telecom Shaanxi chose the NE5000E for expanding the capacity of its IP backbone network.

A router cluster connects a number of single-f rame router s through high-speed opt ica l backplanes to successfully reduce the number of interconnection interfaces and increase the data forwarding capabilities of core nodes. Featuring an engine for unifi ed management and route control, it functions as a single router logically. Th is solution has defi nitely helped the operator to simplify the backbone network’s topology and routing structure while making maintenance easy and simple.

Signifi cant increase in metro egress capacity

Previously, China Telecom Shaanxi adopted a network structure combining the traditional IP

backbone and metro cores, where each capacity expansion of downstream devices may cause an increase in bandwidth-consuming links. These convergence links, available in large numbers, did not create real value but ate into network profi tability with exorbitant maintenance costs.

To optimize the network structure, China Telecom Shaanxi connected metro core routers distributed in each city to IP backbone routers in May 2009. Two single-frame NE5000Es deployed on the provincial backbone network resulted in a complete fl attening of the backbone network.

At that point , the egress bandwidth for subscribers under monthly fee plans in Xi’an reached up to 8Mbps. As a result, legacy metro core routers were coming close to their maximum capabilities, causing an urgent need to increase the MAN’s egress bandwidth.

China Telecom Shaanxi then combined the single-frame NE5000Es on the provincial backbone network and those on Xi’an’s metro cores into a unique back-to-back router cluster without a central switching frame, increasing the forwarding capacity of the whole system to 2.56Tbps, This met the increasing demand for egress bandwidth in Xi’an’s MAN and achieving China Telecom’s goal of carrying MAN traffi c locally.

Amid the global economic slump, back-to-back router clusters have reduced investment costs for China Telecom Shaanxi and provide smooth expansion capabilities that fully support the operator’s future business growth. With a moderate height, a back-to-back router cluster is the most lightweight of its kind in the industry and occupies a small space. No doubt it has been an ideal solution for China Telecom Shaanxi to expand the

To ensure the quality of bandwidth-hungry services, China Telecom Shaanxi decided to upgrade its back-to-back router To ensure the quality of bandwidth-hungry services, China Telecom Shaanxi decided to upgrade its back-to-back router cluster that had been operating stably so that it could

37

Win-Win / JAN 2010

Remarkably, benefi ting from Huawei’s innovative In-service Hardware Expansion (ISHE) technology, China Telecom Shaanxi did not have to replace any hardware during the upgrade to save on investment.

Remarkably, benefi ting from Huawei’s innovative In-service Hardware Expansion (ISHE) technology, China Telecom Remarkably, benefi ting from Huawei’s innovative In-service Hardware Expansion (ISHE) technology, China Telecom Shaanxi did not have to replace any hardware during the

38

capabilities of its MAN core nodes swiftly at the initial phase and paved the way for the sustainable development of the operator’s MAN.

Network development: a never-ending story

To ensure the quality of bandwidth-hungry services such as high-defi nition video and streaming media on demand in the next 3 to 5 years, China Telecom Shaanxi decided to upgrade its back-to-back router cluster that had been operating stably so that it could operate at up to 5Tbps. Upgrading began in September 2009 as part of its initiative to deploy the world’s fi rst 2+4 multi-frame router cluster.

Based on the traffi c bandwidth model for Xi’an, the bandwidth required per 10,000 subscribers in 2010 is expected to approach 12.4Gbps by 2010. China Telecom Xi’an’s initiative will enable the Xi’an MAN to accommodate up to 4 million subscribers, meeting the requirements of core backbone equipment in the provincial capital for a large capacity and strong scalability.

Remarkab ly, bene f i t ing f rom Huawe i ’s innovative In-service Hardware Expansion (ISHE) technology, China Telecom Shaanxi did not have to replace any hardware during the upgrade to save on investment. Th e NE5000E router cluster can scale smoothly up to a 2+8 router cluster by adding line board frames without aff ecting the existing services and network topology. Moreover, the NE5000E

router cluster supports a central frame customized to requirements eff ectively minimizing investment. Expensive optical components such as photon cards are designed to be plug-in cards. This eliminates the need for the operator to purchase components at one time to further cut expansion costs.

Due to the increasing number of ports, the 2+4 router cluster solution has set a stage for China Telecom Shaanxi to flatten its MAN by phasing out numerous devices working at the metro convergence layer. So far, the operator has completely flattened the provincial backbone network and MAN. Th is has simplifi ed the network topology and reduced maintenance costs and complexity to a minimum no more sending people and spare parts to various locations to troubleshoot upgrading glitches.

Dealing with the explosive growth of bandwidth, China Telecom Shaanxi has implemented a whole suite of solutions that range from IP backbone to metro core. Th rough these solutions, the operator has successfully deployed a future-proof network with a super-large capacity, created a simplified network s tructure , reduced the TCO, and sustaining healthy full-service growth.

To date, the operator has branches in 10 cities, 83 counties, districts, and county-level cities. It is currently serving more than 10 million subscribers with outlets distributed in urban and rural areas throughout the province. Notably, Internet users (over 1.6 million) are contributing the most to its subscriber base and growing at a rate of 50% annually.

Winners


BaiduBy Chen Yali Editor: Liu Zhonglin [email protected]

searching speeds upBaidu recently consolidated its position as China’s leading search engine thanks to Huawei’s high performance Solid State Disk (SSD) server solution. With the demonstrable performance benefi ts afforded by Huawei, Baidu anticipates sustained dominance in this intensely competitive fi eld.


The world’s largest Chinese search engine

he huge Chinese market coupled with the nation’s rapidly developing economy offers tremendous potential for the Internet. According to the 24th

Statistical Report on Internet Development in China released in July 2009 by China Internet Network Information Center (CNNIC), 69.4% of China’s 338 million netizens used search engines as of June 30, 2009. Unsurprisingly, the Chinese market is an attractive proposition for profit-hungry enterprises.

With less than a decade’s history, Baidu is a modern success story that exemplifies the power of innovation. As the world’s largest Chinese search engine, Baidu provides users with simple and reliable Internet search access to over 10 billion Chinese web pages, covering the full spectrum of Internet content.

The company has also pioneered an Internet search community platform–including tieba.baidu.com, zhidao.baidu.com, baike.baidu.com, and hi.baidu.com–to offer a high speed range of Internet services. A true innovator, Baidu has applied a stream of technological innovations to continuously boost its market position.

Search server: the bottleneckB a i d u’s s e a r c h p l a t f o r m p r o c e s s e s a n

unimaginable amount of data from hundreds of millions of clicks across 138 countries each day. Cloud computing and tens of thousands of servers capture, mine, consolidate, and index information for users everywhere , 24/7. Hence, ser ver performance directly impacts on end user quality of experience (QoE), and the recent explosion in information coupled with the steady increase in users has created a huge traffic surge. This has necessitated higher capacity and high performance servers that can perform faultlessly. Limited ARPU, savvy consumers, and fierce competition are forcing Internet companies to continually raise QoE to retain users and foster growth.

Conventional servers, however, are poor performers. Baidu’s search engine was based on universal rack-mounted servers, the hard disks of which lagged far behind current service demands due to their slow read-write speeds. A search server needs extremely high read-write speeds to process massive amounts of tasks, and any bottleneck quickly degrades end user QoE.

To meet increasing expectations, Baidu was forced to invest tens of millions of dollars each year in optimizing existing software and system architecture,

T

Winners

Win-Win / JAN 2010

The deployment of the solution has boosted search performance by 50% and reduced single server power consumption by 75%, while soaring customer satisfaction has assured Baidu’s market dominance and sustained growth.

and purchasing additional high performance servers. With this in mind, Baidu was keen to find cooperation partner for server customization, including expanding the storage capacity and raising the access speeds of its search servers.

The strength of two

Ba i d u t u r n e d t o Hu a we i f o r i t s h i g h -performance search servers. As a world-leading t e l e com so lu t ion p rov ide r, Huawe i ha s a comprehensive understanding of all aspects of the ICT industry. Th e 3G era is witnessing the rise of the mobile Internet, which is subsuming traditional Internet services. World-leading operators, CPs, and SPs are looking at ICT as the strategic future, of which servers form a crucial part. Huawei is in a position to fully exploit its competitive capabilities in the telecom and Internet fields to provide cutting-edge servers and E2E support services.

Despite being on the market for over 25 years, the high price of SSD devices had resulted in their limited deployment in data centers. As the flash chip price per MB continues to decline, SSD technology is becoming increasingly popular in scenarios that feature a heavy disk I/O load, such as online transaction and video editing systems. SSD technology outperforms even the fastest traditional disk storage device, ranging in access time from between 0.01ms and 0.1ms compared with 4ms to 10ms in traditional high speed disks that operate at

15,000 rpm. Huawei derives its success by marrying high

technological capabilities with a customer-first approach, and its cooperation with Baidu was no exception. Aiming to ensure Baidu’s sustained growth through raised QoE and lowered TCO, the partners spent six months exploring the optimum plan for applying SSD technology to search servers. Capitalizing on a precise understanding of Baidu’s business portfolio and underpinned by its strong R&D prowess, Huawei delivered the fi rst batch of cutting-edge, customized SSD servers to Baidu in mid-2008. Revolutionizing Baidu’s performance, the deployment of the solution has boosted search performance by 50% and reduced single server power consumption by 75%. Moreover, the solution lowered Baidu’s investment in new servers by 50%.

Huawei’s eco-friendly servers have culminated in energy-efficient equipment rooms that have substantially lightened Baidu’s CAPEX, O&M and thus TCO burdens, while soaring customer satisfaction has assured Baidu’s market dominance and sustained growth.

Currently, Baidu and Huawei are looking at ways to broaden their cooperation and establish a long-term partnership. In the end of 2007, Baidu and Huawei announced to set up a joint lab. Noted for its robust expertise in the industry, Huawei’s subsequent partnerships have provided solutions for some top Chinese Internet companies including Alibaba, Tencent, Taobao, 51com, and ZTgame.

The deployment of the solution has boosted search performance by 50% and reduced single server power The deployment of the solution has boosted search performance by 50% and reduced single server power The deployment of the solution has boosted search performance by 50% and reduced single server power consumption by 75%, while soaring customer satisfaction has assured Baidu’s market dominance and sustained growth.

41

Win-Win / JAN 2010

EMOBILEBy Zuo Shuai Editor: Liu Zhonglin [email protected]

Japan’s rising star in mobile broadband“This is a signifi cant milestone for EMOBILE, our network partner Huawei, and the Japanese telecommunications industry as it heralds the introduction of truly high-speed mobile broadband services that will substantially improve the user experience in Japan.” –Mr. Eric Gan, Representative Director, President and COO of EMOBILE.

42

Winners

Win-Win / JAN 2010

In July 2009, EMOBILE together with Huawei launched Japan’s fi rst HSPA+ network, fortifying its leading broadband market position and strong brand recognition.

Opportunities amid harsh competition

MOBILE entered Japan’s mobile market in March 2007. At that time, the market was dominated by three operators: NTT DOCOMO, KDDI and So f tBank

Mobile. As a newcomer, EMOBILE implemented a package of eff ective strategies to compete with the three market leaders.

In 2007, Japan’s mobile broadband market was still in an emergent stage without a defi nitive top dog. Also, the number portability policy which began in 2006, intensifi ed the competition. Inspired by the growth potential of mobile broadband, EMOBILE entered the market with a unique approach.

New operators usually deploy a massive number of base stations to deliver high-quality voice service coverage. Backing the trend, EMOBILE placed a higher priority on data services. Since its inception, EMOBILE has focused on becoming the mobile broadband leader in Japan.

Japan’s mobile market generates a high ARPU and a low MOU. This is because trendy young people favor mobile data services and care a lot about access speed. With a lower income, they are also quite sensitive to price. To attract young and fashionable subscribers, EMOBILE launched a strategy to provide higher access speed with lower prices, and began to select equipment vendors to deploy a network in 2007.

Fastest access speed in Japan

Japan has a highly developed telecom industry that requires high-quality mobile equipment. Previously, western and domestic vendors had dominated the mobile equipment market. Once again going against the trend, EMOBILE chose Huawei to help them deploy a cutting edge WCDMA network in Japan.

At that time, Huawei was beginning to deploy WCDMA networks on a massive scale worldwide and its industry-leading distributed base stations were well received by operators. Moreover, Huawei has stepped up its eff ort toward evolving WCDMA technologies, such as HSPA, HSPA+, and LTE, retaining its position as an industry leader in mobile broadband technology.

Geared to EMOBILE’s unique strategy and Japan’s particular environmental conditions such as frequent earthquakes, thick walls, a concentration of tall buildings and high site leasing fees, Huawei recommended a network-wide distributed base station solution.

With baseband and RF units separately installed, the distributed base station has a small footprint and supports fl exible installation. Far smaller than a traditional macro base station, the distributed base station adapts well to local conditions, signifi cantly saving transport and installation costs as well as installation time.

To maintain its lead in mobile data services after WCDMA network deployment, EMOBILE

In July 2009, EMOBILE together with Huawei launched Japan’s fi rst HSPA+ network, fortifying its leading broadband In July 2009, EMOBILE together with Huawei launched Japan’s fi rst HSPA+ network, fortifying its leading broadband market position and strong brand recognition.

43

E


contracted Huawei again to upgrade its WCDMA network to HSPA+. Based on Huawei’s innovative distributed base station, the HSPA+ network covers a range of cities including Hokkaido, Sendai, Niigata, Hiroshima, Fukuoka, and Nagasaki etc. Th e network supports download speeds of up to 21Mbps, giving subscribers an enhanced mobile Internet experience along with faster media downloads.

As Huawei can evolve its Node Bs smoothly towards HSPA+, network upgrading becomes quick and easy. In March 2007, EMOBILE launched Japan’s first 3.6Mbps HSDPA mobile broadband network, upgraded the network to 7.2Mbps HSDPA in December 2007, 1.4Mbps HSUPA in November 2008, 5.8Mbps HSUPA in April 2009 and then to 21Mbps HSPA+ in July 2009.

The end result is seen in their slogan “Japan’s fastest”. In July 2009, EMOBILE together with Huawei launched Japan’s first HSPA+ network, fortifying its leading broadband market position and strong brand recognition.

In addition, Huawei customized a network-wide distributed base station solution for EMOBILE, helping the operator reduce CAPEX and OPEX significantly and offer cheaper and faster mobile broadband services. In March 2007, EMOBILE unveiled a monthly data package with unlimited traffi c for the fi rst time in Japan. With the lowest charges in the market, subscribers have fl ocked to sign up.

Another popular hit with users was selling data cards together with ultra mobile PCs, for use anytime, anywhere.

30 months of rapid growth

EMOBILE has stuck to their fast-speed and low-price strategy, specializing in data services and expanding into voice services.

By November 7, 2009, EMOBILE was serving over 2 million subscribers and reached the largest market share of data card for 30 consecutive months at a staggering pace. Th eir network now covers more than 90% of Japan and voice services are beginning to serve subscribers. EMOBILE has thrived despite the strong competition with differentiated market strategies and by focusing on and exploring a blue ocean segment in mobile broadband.

Cooperation with Huawei has enormously helped EMOBILE to become the rising star in mobile broadband. In terms of network evolution, Huawei’s 4th generation base stations are powerful enough to evolve the network smoothly towards 42Mbps or 84Mbps HSPA+. In July 2009, EMOBILE released a roadmap outlining plans for network evolution to DC-HSDPA+ and LTE, putting them yet another step ahead of the other operators.

“We are confident in providing a pipe. It is a pipe, but it is a GREAT pipe. High speed, fl at-rate mobile broadband data is in itself a diff erentiated service,” said Dr. Sachio Semmoto, EMOBILE Founder, Representative Director, Chairman & CEO. With a combination of differentiated marketing strategies and a clearly-defined model for mobile broadband network construction, EMOBILE is ready to sail farther and faster.

Winners

Win-Win / JAN 2010

By Yi Lifeng Editor: Xue Hua [email protected]

Nextelwinning both PTT and 3G broadband

It can be challenging for telecom operators struggling to keep pace with fast growth in Peru. This is one reason why the industry is moving to 3G to meet the growing communication needs in this ancient cultural center and Nextel Peru is poised to tap the vast potential of 3G and mobile broadband services.

45

Win-Win / JAN 2010

teeped in Incan tradition and set against the backdrop of the spectacular Andes, Peru is a major South American tourist destination. With wide open spaces, big

mountains and modern metropolitan areas, it can be challenging for telecom operators struggling to keep pace with fast growth. This is one reason why the industry is moving to 3G to meet the growing communication needs in this ancient cultural center and Nextel Peru is poised to tap the vast potential of 3G and mobile broadband services.

PTT: once a secret weapon

Nextel is a brand of NII Holdings and operates five subnets in Latin America. Nextel Peru is the third largest mobile operator in Peru. Though its market share is not high, Nextel Peru boasts the highest ARPU (an average of 30 USD in 2008) and the lowest churn rate (an average of 1.8% in 2008) in the Peruvian mobile market. Their major group service push to talk (PTT) also has helped boost the ARPU and reduce the churn rate.

Nextel Peru’s PTT service is provided through the integrated digital enhanced network (iDEN), featuring fast access and high service quality. If users like a certain service, they can invite relatives and friends to join the group. Once these group

users have formed habits and patterns, they are less likely to be lured away by other operators and separated from their groups, significantly reducing churn rates.

PTT service is especially suited for group communications among government agencies and public utilities. These high-end subscribers have given Nextel Peru an ARPU 25% higher than its rivals.

Urge to develop 3G services

The Latin American telecom market has seen explosive growth. Operators in Peru have launched 3G services to entice subscribers and cater to the affluent tourist market. Mobile operators like Claro and Movistar have rolled out 3G mobile broadband services, attracting a large number of subscribers and allowing the introduction of the highly successful iPhone.

In contrast, limited by iDEN technology, Nextel Peru found it hard to compete in diversified multimedia data services and smart phones, since they could provide only traditional voice service (bi-directional wireless intercommunication) and pure SMS service. Nextel Peru initiated major strategic transformation in 2008.

First, Nextel Peru hoped to maintain its existing

S

46

Winners

Win-Win / JAN 2010

advantages in the PTT service, especially its leading position in the public security and service areas. At the same time they aimed to vigorously develop value-added services to enrich the service experience. For example, the PTT service based on mobile networks was added with feature services such as status presence (enabling one subscriber to know when another is online) and point-to-multipoint group calls.

Second, for the tourist sector, Nextel Peru planned to develop mobile broadband services to attract roaming subscribers who could bring a high ARPU and sharpen their competitive edge.

Nextel Peru realized that it had to break through constraints of the original iDEN network and quickly construct a 3G network. In 2008, with the support of telecom regulator MTC, Nextel obtained an operating license for the 1900MHz band, and took the subnet in Peru as the fi rst stop in transforming the iDEN network into the 3G network.

Future-oriented strategic planning

After being licensed the 1900MHz band, Nextel Peru conducted an analysis of the 3G systems that would be conducive for better service development and have more appeal to subscribers. After a comprehensive comparison of CDMA and

WCDMA in terms of terminals, marketing costs, and network evolution, Nextel Peru finally chose WCDMA for the 3G network.

Constructing a new WCDMA network in an economical and eff ective mode was a big challenge. At the onset of network construction, Nextel Peru explicitly pointed out that this was a service-driven network, requiring each layer of the network to accommodate the future needs of end users for high bandwidth and high rates. Nextel Peru planned on it taking five years to construct a WCDMA network with a total of over 600 sites covering every corner of the country. Th e fi rst phase would cover the capital city, Lima and the second and third largest cities in Peru.

After considering Huawei’s impressive track record for successful 3G implementation, Nextel Peru chose Huawei as its partner for 3G network construction.

Build end-to-end advantages

Though the traditional WCDMA network could provide high-speed mobile broadband data services like HSPA, there was a blank spot for PTT applications. To continuously provide high quality PTT services, meet the consumption habits of end users, reduce the churn rate, and smoothly realize network transformation, Huawei partnered with Qualcomm to develop a customized PTT over

47

Huawei partnered with Qualcomm to develop a customized PTT over WCDMA solution which made it possible for PTT services to be laid over the WCDMA network, enabling users to enjoy 3G mobile services while using PTT wireless service.

Huawei partnered with Qualcomm to develop a customized PTT over WCDMA solution which made it possible for PTT Huawei partnered with Qualcomm to develop a customized PTT over WCDMA solution which made it possible for PTT Huawei partnered with Qualcomm to develop a customized PTT over WCDMA solution which made it possible for PTT services to be laid over the WCDMA network, enabling users to enjoy 3G mobile services while using PTT wireless service.


WCDMA solution. Th is solution made it possible for PTT services to be laid over the WCDMA network, enabling end users to enjoy 3G mobile broadband data services while using PTT wireless service.

Nextel Peru and Huawei conducted a thorough analysis of the projected mobile market in Peru for the next three years, and based on the forecast of subscriber scales and business models, mapped out a detailed plan for each layer of the network. Huawei’s end-to-end 3G solution for the entire network will not only help Nextel Peru resolve the node complexity problem, but also simplify the interworking of equipment from multiple vendors, and realize quick, low cost network construction. Th e best service quality is ensured through an end-to-end QoS guarantee.

Huawei’s industry-leading 3G solution will significantly enhance Nextel Peru’s network capacity. After the realization of VoIP over HSPA, network capacity will be 1.5 times higher than a traditional WCDMA network.

By adopting Huawei’s latest ATCA-based core network, Nextel Peru will gain even higher capacity and reliability and realize a CAPEX reduction of at least 30%.

At the transport layer, Nextel Peru adopts the world’s fi rst IP-based packet microwave combined with the wireless PTN bearer network, which can realize IP transport of the entire network and will

help Nextel Peru to save an estimated 35% of CAPEX and 25% of OPEX.

Representing the largest chunk of investment, wireless access is always at the core of Nextel Peru’s network planning. Site leasing is extremely tough, especially in densely-populated central business districts. By sufficiently utilizing the existing network resources and based on the flexibility, small size, and easy installation of Huawei’s distributed base stations, Nextel Peru constructs its WCDMA network at the same sites of the existing iDEN network and eff ectively reduces construction costs.

Nextel Peru also fully considers future evolution and protects their original investment by choosing Huawei’s SingleRAN solution, which can help them transform smoothly into the HSPA+ and LTE networks. At the core network side, they only need to upgrade software to address the needs of IMS and future network architecture.

Steven M. Shindler, Executive Chairman of NII Holdings was quite positive about the future, “We’re deploying a 3G network in Peru as a way to offer higher speeds and capability to our existing customers, maintaining our differentiation of Push to Talk and creating a path for us to move eventually into some of the higher consumer segments with a pre-paid offering, which could potentially as much as double our target market in a place like Peru.”

The E2E 3G solution for the network will not only help Nextel Peru resolve the node complexity problem, but also simplify the interworking of equipment from multiple vendors, and realize quick, low cost network construction.

The E2E 3G solution for the network will not only help Nextel Peru resolve the node complexity problem, but also simplify The E2E 3G solution for the network will not only help Nextel Peru resolve the node complexity problem, but also simplify The E2E 3G solution for the network will not only help Nextel Peru resolve the node complexity problem, but also simplify the interworking of equipment from multiple vendors, and realize quick, low cost network construction.

Winners


E-government in Uganda

By Wu Min Editor: Chen Yuhong [email protected]

Telecommunications are a vital feature of a nation’s infrastructure, without which socioeconomic development is next to impossible. Telecom networks touch all sections of society; they are the frame through which the information that gives a country its lifeblood flows. Astride the equator in Uganda, Huawei jointly constructed the nation’s e-government network to assist the Ugandan government enhance its social influence and contribute to continued prosperity.


ue to the catastrophe of civil war and economic collapse that plagued the 1970s and 80s, Uganda was once one of the most underdeveloped countries

in the world. Since then, under the regime of the National Resistance Movement, the nation has bounced back from the abyss to achieve political stability and relative peace. Underpinned by a healthy tourist industry, abundant mineral reserves, reduced foreign debts, successful international aid programs, and a continuous stream of foreign investment and trade, Uganda now boasts one of the most robust economies in Africa.

A major undertaking of the Ugandan government remains the creation of an attractive investment climate to draw in foreign investment. The spread and exchange of information has become an indispensable part of securing investor confidence, but Uganda’s lack of telecom facilities had prevented potential foreign investors from using the Internet or effectively communicating by email.

Two networksTo remedy this untenable situation, Uganda’s

e-government project comprised two parts: (1) An e-government network and (2) A national backbone transport network, including data commun i c a t i on s , f i b e r t r an smi s s i on , IP telephony, video conferencing, security, and data storage. The project was designed to meet current communication requirements and lay a solid foundation for future service evolution. Divided into three phases, the first phase of the e-government network and national backbone transport network was completed and accepted in 2008.

E-government network

The e-government project was planned to initially provide video conferencing (VC), voice over IP (VoIP), office automation, and an email system.

To support these services and future evolution, a metropolitan area network (MAN) was constructed as part of the first phase to cover Kampala, Entebbe and Jinja . The second and third phases will involve enhancing the MAN and constructing two national data centers.

Second-phase MAN construction will deploy backup devices to establish a reliable and secure biplane network for government departments i n K a m p a l a , J i n j a a n d E n t e b b e . A d a t a communication network will also be built for 16 other cities. The districts that are connected by the national backbone optical network will fall under an IP backbone network that connects Uganda’s major cities. The e-government-based infrastructure will deliver a range of services and applications including VoIP, voice conferencing, and the Internet to effectively link cities and government departments.

During the second phase, a parent data center will be constructed in Kampala; this will be complemented in the third phase by a secondary data center in Jinja . The Huawei solut ion deploys servers that provide various applications including email, portal websites, storage, and office automation and security. Network devices, such as routers, switches and firewalls, will support these servers.

After the completion of the e-government network, two 2.5G resilient packet rings (RPRs) will connect the major locations of 28 government departments and implement intelligent ring protection to guarantee carrier-class network reliability. A Gigabit Ethernet link will cover the remaining government departments with raised bandwidth and high speed access. Two high performance NE80E core routers in the Statistical Office will serve as the e-government network core, converging data from different districts into the Gigabit Ethernet. Finally, a special-purpose network will link the main and secondary data centers.

The entire e-government network can effectively

D

Winners

Win-Win / JAN 2010

The deployment of the e-government platform increases the transparency of government activities and enables departments to share public data.

51

classify and manage services and departmental communications through the highly reliable, secure, and inexpensive MPLS VPN technology.

National backbone transport network

With na t iona l backbone opt i c a l f ibe r s connecting districts, the IP backbone network will cover Uganda’s major cities with a core data communications network and pave the way of providing diversifi ed services such as the Internet, VoIP, and video conferencing.

Th e fi rst phase of the national backbone network will cover Kampala, Entebbe, Mukono, Bombo and Jinja with a 194km whole optical route. Th e stations on the ring network will use a wavelength of up to 2×2.5G through DWDM, while the stations on the chain network will share a 2.5G SDH link capacity. Huawei’s OptiX iManager T2000 embodies a complete network management solution for managing optical network devices. In turn, the Huawei OptiX BWS 1600G, OptiX OSN 3500 and OptiX OSN 7500 products fully satisfy requirements for transmitting multiple services across the backbone network and for constructing a multi-service platform.

The second and third phases have been mainly designed to expand the scope of network construction. The 1,542km optical network will cover 19 cities including Luwero and Nakasongola. Th e wavelength-division multiplexed ring network has a rate of 2×2.5G and a link rate of up to 2.5G.

The completed national backbone network will comprise two ring networks and one chain network. Multiplex section protection (MSP) technology protects the ring network as part of a network structure that delivers suffi cient bandwidth for access nodes and avoids single point failures. Thus, service interruption caused by networking issues can be eliminated.

Reaping benefits

Th e deployment of the e-government platform increases the transparency of government activities enables departments to share public data and enhance inter-departmental coordination, reduces government administration costs, and generally improves work efficiency. With a dedicated government network, the Ugandan government can more easi ly construct and maintain its of f ic ia l webs i te and implement a bus iness information platform capable of attracting more foreign investment and generating employment opportunities. Thus, the government can both improve its international reputation and seek to further boost economic development.

In November 2009, the East African submarine cable has extended to the border between Uganda and Kenya, and phase II of Uganda’s e-government network will be connected with the submarine cable. As East Africa has relied on expensive satellite connections for telephony and Internet access, local operators and software companies are looking forward to the submarine cable with improved connection speeds and lower operating costs. In addition, the optical transmission is more reliable and of higher capacity compared with microwave transmission.

The government can lease the network to Uganda’s six operators to utilise and benefit from the country’s backbone network, and on this basis, to carry out businesses such as e-hospital, e-shopping, e-education and others, that government itself can do to enhance service and interoperational efficiency and effectiveness. Th i s w i l l a l s o he lp Uganda a t t r a c t more foreign investment and generate employment opportunities. Thus, the government can both improve its international reputation and seek to further boost economic development.

voice from operators perspective tao of business winners ... · countries, telenor was dedicated to...

Documents