ZTE Announces 2009 Annual Results - zte-deutschland.de€¦ZTE Announces 2009 Annual Results 9 April 2010, Hong Kong ― ZTE Corporation (“ZTE” or the “Group”) today announced

ZTE Announces 2009 Annual Results

9 April 2010, Hong Kong ― ZTE Corporation (“ZTE” or the “Group”) today announced its annual results for the year ended 31 December 2009.

Based on HKFRS, ZTE recorded a r e v e n u e o f a p p r o x i m a t e l y U S D 8 , 8 2 0 . 7 m i l l i o n i n 2 0 0 9 , representing an increase of 36.08% against 2008. Net profit was USD359.7 million, representing an increase of 48.06% against 2008. Basic earnings per share were USD0.21. In 2009, net cash flow from operating activities per share was USD0.28.

Applying PRC ASBEs, during the year under review, the Group’s

revenue from principal operations was approximately USD8,820.7 million, representing an increase of 36.08% against 2008. Net profit was USD359.7 million, representing an increase of 48.06% against 2008. Earnings per share amounted to USD0.21. In 2009, net cash flow from operating activities per share was USD0.31.

T h e B o a r d o f D i r e c t o r s recommended payment of a final dividend for the year ended 2009: the creation of 5 shares for every 10 shares and a cash dividend of USD0.44 for every 10 shares (including tax).

During the year, the Group’s

revenue from domestic operations amounted to USD4,449.6 million, representing a year-on-year growth of 74.04%. The construction of 3G networks was strongly supported by the government as a new driver of economic growth. Leveraging the opportunity of full-scale 3G construction in the nation, the Group emerged to become China’s largest supplier of 3G network equipment as it dominated in the network construction tenders of the three leading carriers and developed positive and balanced strategic partnerships with the big three. Meanwhile, strong sales were reported for its TD-SCDMA, CDMA and xPON products.

As for revenue from the international operations, it grew to USD4,371.1 million, 11.34% more year-on-year, and accounted for 49.56% of the total revenue of the Group. The Group overcame the impact of the financial crisis and sustained growth in a lacklustre international telecom market on the back of its cost-competitiveness, technological edge and financial strengths. The Group made successive breakthroughs in the high-end markets around the world, as its principal products (with the exception of terminals), such as bearer networks, access networks and service networks, were gaining footholds in important markets in Europe and America, which are set to become significant growth spots for the Company in the coming years.

News Brief

ZTE Chairman Hou Weigui (R2), President Shi Lirong (L2) and Executive Vice President Wei Zaisheng (R1) attend the 2009 Annual Results Announcement Conference

Vol. 12 No. 4 Issue 123 April/2010

A Monthly Publication

Interview

Delivering Quality Projects, Offering Excellent ServicesAn interview with Xu Huijun, Senior Vice President of ZTE Corporation

P3

P12China Mobile: Driving Full-Service Operation Through Innovations To boost service competitiveness, China Mobile has to leverage its advantages and expand mobile business into the fields of broadband Internet, Customer Premises Network (CPN), and fixed-line VoIP

Service Continuity Solution for Multiple ScenariosFor operators, IMS-based integrated VCC serves as an important means of offering diverse and differentiated services, and offering users a seamless and high quality experience

P10

Focus

P7 IMS: An Impetus for Fixed Network TransformationThe successful IMS-based fixed network transformation put the operator on the road to fixed and mobile convergence

www.zte.com.cn

IMS Deployment in the Kingdom of Saudi Arabia ZTE’s IMS, with its SIP-based networking and access agnostic features, was the best choice for Atheeb in its goal of converging multiple access technologies such as WiMAX, xDSL, and xPON

P14

2 ZTE TECHNOLOGIES April 2010

Editorial Board

Editor-in-Chief: Gu Yongcheng

Deputy Editor-in-Chief: Huang Xinming

Editorial Director: Zhao Lili

Executive Editor: Yue Lihua

Editor: Paul Sleswick

Circulation Manager: Wang Pingping

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ZTE Profile

ZTE is a leading global provider of

telecommunications equipment and network

solutions. It has the widest and most complete

product range in the world—covering virtually

every sector of the wireline, wireless, service

and terminals markets. The company delivers

innovative, custom-made products and

services to over 500 operators in more than

140 countries, helping them achieve continued

revenue growth and shape the future of the

world’s communications.

Research Note

22PTN: A Bearer Technology RevolutionFlexible bandwidth control, service bandwidth assurance, and IP-based features required by wireless services have been the development trend of PTN

News Brief 27

P19

Third Eye

18ZTE to Launch IMS 6.0 Solution for LTE Networks The IMS 6.0 solution offers a variety of multimedia solutions critical to deploying a successful LTE network: Converged Conference, Tele-presence, Surveillance, Gaming, Streaming and Rich Communication Suite

Global GSM Incremental Market AnalysisWith rapid growth in 2009, ZTE became one of the top three providers of global GSM incremental market

19

P24

24Ongoing Development of 3G NetworksAt present, and for several years to come, development from HSPA to HSPA+ and then to LTE will be most suitable

Focus

16Rich Communication Suites ― A Significant Convergence InitiativeRCS is important because it represents an attempt to bring features and functionalities offered in the IP world into mobile telecom services

�ZTE TECHNOLOGIESApril 2010

Interview

Xu Huijun has been a Senior Vice President of ZTE Corporation since 2004. He graduated from Tsinghua University in 1998 with a master of science degree in engineering, specializing in electronic engineering. He joined ZTE in 1998 and had served as a project manager of the General Products Division, the head of Beijing Research Centre and the general manager of the General Products Division from 1998 to 2003. Since 2004 he has been Vice President of the Company in charge of the General Products Division. Since 2007 he has continued to be Senior Vice President of the Company in charge of after-sales services of the sales operations. Mr. Xu has many years of experience in the telecommunications industry, including over 11 years in managerial positions.

By Fang Li, Zhao Lili

Delivering Quality Projects, Offering Excellent Services

T elecom operators are now facing greater competition than ever before. Having been

impacted by the global economic downturn and competitive pressure from the Internet industry, many are seeking to streamline their service operations and have begun redefining their positions in the value chain. An increasing number of operators a re choos ing to outsource the construction, planning, operation, and maintenance of their networks as a means of controlling overall costs, and in order to focus their attention on business operations and user expansion. Higher requirements are therefore being placed on project delivery and engineering services, and while this brings about some difficult challenges, it also presents significant opportunities to equipment suppliers. Recently, the reporters of ZTE TECHNOLOGIES interviewed Xu Huijun, Senior Vice President of ZTE Corporation. In the interview, Xu Huijun analyzed these challenges and opportunities, and affirmed his full confidence in the growth of ZTE’s services field.

Journalist: Operators are now placing greater importance on engineering service capabili t ies. What is the significance of engineering services

An interview with Xu Huijun, Senior Vice President of ZTE Corporation


InterviewInterview

i n t h e d e v e l o p m e n t o f t o d a y ’s telecommunications marketplace? What has changed in operators’ needs for engineering services?Xu Huijun: It is true that operators place great importance on project delivery and engineering services when choosing their cooperative partners. There are several reasons for this.

Firs t , because the technology gap between equipment vendors is narrowing, more attention is being paid to their project delivery and engineering services. For example, if a multinational telecom operator plans to construct a new network in a new country, it often has to be done from scratch. The speed of network construction can have great impact on its competitiveness in this country. However, equipment vendors differ considerably in their ability to build such a network. Some may not be capable of building the network as a whole; others may need three or four years to complete the job. If a vendor could provide a turnkey solution that guaranteed network completion within one or two years, the operator would be able to market its network one or two years earlier, and thus gain a competitive advantage. After all, a technology gap can sometimes be narrowed in as little time as six months to a year. The delivery capability of equipment vendors can win more time for operators.

Second, operators have found that their Capital Expenditure (CAPEX) accounts for around 30% (or even less) of total costs, while their Operational Expenditure (OPEX) accounts for a more significant proportion of total costs when the whole value chain or cost structure is analyzed. Therefore, innovation and service guarantees may help operators lower their OPEX.

In addition, operators have more or less the same network infrastructure,

and the technological differences between their devices are becoming smaller. Service quality can thus enhance the operators’ branding and be used to attract more users in market competition. These services include those offered by operators to end users, and those delivered by equipment vendors to operators. The latter involves a quality network, KPI guarantee, and operation support.

These factors have become more important to operators than the value and differentiation inherent in their equipment.

J: What new service models are now available in the industry?Xu: Because operators are focusing more on services, they have created new cooperative models with equipment suppliers, including Managed Services and Managed Capac i ty models . Managed Services involves outsourcing network operation and maintenance to an equipment supplier to guarantee KPI, while Managed Capacity involves further outsourcing network planning and capacity expansion to the equipment supplier. For example, if an operator with 1 million subscribers intends to expand its subscriber base to 5 million in three years, the equipment supplier must not only manage and maintain the existing network, but also plan for future network expansion and optimization.

In this way, the operator can more easily devise its business plan. It need only attract subscribers, and can straightforwardly calculate the income and expenditure in the growth of its subscriber base from 1 million to 5 million. This “Pay As You Grow” model enables the operator to pay the equipment supplier only when its business growth reaches a certain level, otherwise no payment is required. The

Because operators are focusing more on services, they have created new cooperative models with equipment suppliers, including Managed Services and Managed Capacity models.

5ZTE TECHNOLOGIESApril 2010

operator can effectively control costs and expenditure while maintaining a focus on expanding business. Using this model, the operator can minimize its operational risks with a business profit model and detailed network plan prepared by the equipment supplier. The equipment supplier must develop a clear plan of how and where to distribute the 5 million subscribers, and must keep track of service growth, and make decisions. The “Pay As You Grow” model has been implemented in many places.

J: What is ZTE’s service protfolio and how does it meet the needs of operators?Xu: ZTE continues to expand its services portfolio, which includes equipment installation, debugging and maintenance, turnkey project delivery, Managed Services, and professional services like network planning and design, network optimization, and spare parts services. This year, ZTE is targeting the Indian market and is ready to carry out Managed Capacity services there.

Operators in developed Western countries need more Managed Services, and to counter high labour costs in this area, they are looking to outsource. Through years of development, ZTE

has carried out more than 50 Managed Services projects around the globe, and its level of service has improved rapidly.

Ch inese ope ra to r s s t a r t ed t o outsource spare parts services at the end of 2008. Spare parts services means that operators no longer buy spare parts but services. Spare parts are warehoused by, and remain the assets of equipment vendors, and repair personnel are sent to repair or replace parts if they fail to operate properly. Similar to warranty services for household appliances, spare parts services allows equipment vendors to take advantage of their network scale by sharing their spare parts among different operators in different areas, which can reduce costs on the whole. However, this also raises some management issues because these spare parts have to be properly managed.

I n a d d i t i o n , o p e r a t o r s a l s o attach great importance to network optimization. We have been devoted not only to providing quality equipment, but also to constructing quality networks for our customers. Network optimization is key to ensuring optimal equipment performance in a wireless network. We have rapidly enhanced our capabilities in this regard. According to a third-party evaluation, ZTE ranked first in terms of network KPI in the construction of

China’s three 3G networks in 2009. The gap between ZTE and the industry benchmark is narrowing significantly.

J: How does ZTE ensure its global project delivery? What is central to the competitiveness of ZTE’s engineering services?Xu: Overseas engineering services was our weak link several years ago. Although it is still our weak point today, we have made rapid progress. Here is a typical example: At the 2008 Mobile World Congress in Barcelona, operators talked to us only about technologies; at the 2009 Mobile World Congress, they posed questions about how and whether we could successfully deliver projects; but at the 2010 Mobile World Congress, they no longer doubted our capacity to deliver projects, but talked with us more about future cooperation. We can see that our competitiveness has improved in recent years.

In regards to the core of our compet i t iveness , f i r s t , we have established the world’s most diligent engineering services team. With a strong service consciousness, every member of this team works hard to fulfill the company’s commitment to its customers. When I first took charge of after-sales services, I proposed a


InterviewInterview

slogan: “Perseverance Makes Mission Possible.” It was just a slogan at the time, but today it has become the very essence of what they do. Armed with an awareness that they are competing in all aspects, this diligent team is where our core strength lies.

Second , we have con t inua l ly improved our project management abilities. In particular, after more than two years of cooperation with CSL in Hong Kong, our ability to deliver projects has greatly improved. Since last year, we have been trying to effectively control project costs, and following on this year, we aim to improve our ability to control project quality. We intend to summarize the best practices of project management and develop teaching materials for our field engineers around the globe.

Third, we have enhanced our ability to concentrate resources thanks to project-based marketing practice. In an integrated project management process, projects are carried out in sequence so that our resources can be concentrated. Those projects at the top of the sequence list are guaranteed resources not only for project delivery, but also for logistics, R&D, and finance. This is very important for us to win a competitive advantage in the marketplace.

Finally, we have enhanced our ability in engineering services by implementing integrated technologies. We used to divide project delivery by products, but in fact, what we were delivering to operators was a complete network that involved different technologies. For example, a BTS site involves microwave, power supply, and BTS equipment. How could we effectively manage all these elements and deliver a complete BTS site? We now need to improve our ability in this respect. At the beginning of 2010, we restructured

our Engineering Services Department with the view of improving our service planning through an optimized organizational structure. Moreover, we wil l s t rengthen our s tudy of serviceability, and make our equipment easier and less expensive to install and maintain. We also need to improve professional techniques, including those relating to documentation. Under the new organizational structure, we will focus our attention and resources on key projects, and continue to expand our service abilities.

J: What successful projects has ZTE delivered in recent years?Xu: ZTE has delivered many successful projects at home and abroad. In constructing 3G networks in China, we have reached new heights in both project delivery and engineering services. Our delivery speed on these networks was fast, and our network KPI was the best of all. Overseas operators were impressed that tens of thousands of base stations were built up in little more than six months, and then quickly put into commercial use.

In the Hong Kong CSL project, we succeeded in integrating CSL’s original five networks (900MHz GSM, 1800MHz GSM, 900MHz UMTS, 2.1GHz UMTS, and the network of former New World) into one. Within a short time, we significantly improved its network capability and made its network KPI the best in Hong Kong. The original networks were beyond upgrading, but now the integrated network provides a data rate as high as 21.6Mbps, and also supports smooth evolution. We are currently planning the MIMO network and conducting an LTE trial. All these are based on a unified platform.

Our project delivery capabilities were highly regarded last year by Indian

operators Aircel and TTSL. Projects in Europe, including Telenor’s project in Montenegro at the end of 2009, were delivered smoothly. We have also delivered a number of successful projects in the CIS, Africa, and other regions.

On the whole, our engineering capabilities are much stronger in China than abroad. Although we have been delivering more successful projects abroad, there is still a great gap between ZTE and the industry benchmark. We need our spread of successful projects to become more international. The overseas market is large and there exist great differences in different regions in terms of capability, management, and cooperation with partners. How to broaden our successes to these regions is our major concern.

J: Finally, would you talk about the future plans and vision of ZTE in the field of after-sales service?Xu: Our overall vision is to make our engineering services one of the company’s core advantages and one of the company’s main sources of revenue. Operators value engineering services no less than equipment. In 2009, our revenue from engineering services accounted for only 7%–8% of the company’s total revenue. The growth of engineering services is not linear, but based on equipment stock. So its growth might be exponential, and our space for development very large.

On the one hand, we must do well in each project and build our brand image through successful cases; on the other, we must improve our capabilities in project management, resource concentration, serviceability, and integrated technologies delivery. Only with enhanced core competence can we truly fulfill our vision.


IMS:

By Fu Feng

An Impetus for Fixed Network Transformation

FocusFocus

Around the globe, full-service opera t ion i s becoming a development trend within

the telecom industry. Of the world’s top 100 operators, 67 are full-service operators that generate more than 70% of the industry’s total income and 63% of total profits. Full-service operators

account for the majority of leading global operators. However, with the sharp increase in demand for integrated and multi-media services, full-service operators—in particular fixed network operators—are facing significant challenges. These include:■ Complex s t ruc tu re and h igh

maintenance costs due to the use of multiple switch modes (including fixed softswitch, fixed TDM, mobile softswitch, and mobile TDM);

■ The inability of existing softswitch networks to support integrated or multimedia services;

■ High management and maintenance


FocusFocus

Figure 1. ZTE IMS-based fixed network transformation solution.

elements are introduced first before replacing the network with IMS. The fixed network transformation with IMS can be done in three phases:■ Phase I: Build a new IMS core

network. Introduce AGCF and P r o x y - C a l l C e s s i o n C o n t r o l Funct ion (P-CSCF) to access IMS users; introduce SIP AS to offer users broadband multimedia services; and introduce Media Gateway Control Function (MGCF) to a l low the IMS domain to interoperate with the NGN domain, the PSTN domain, Media Gateway (MGW), and Tandem Switch (TS).

■ Phase II: Select a certain area for transformation trial. Trial the connection of existing narrowband users to IMS through AGCF, and the connection of existing broadband users to IMS through P-CSCF. Transfer user data and services to IMS and gradually

ZTE IMS-Based Fixed Network Transformation Solution

Based on years of experience in mature IMS commercialization, ZTE has launched an IMS-based fixed network transformation solution that supports multiple access modes and helps operators build an advanced full-service network, as shown in Figure 1. The IMS target network can be divided into four layers: service layer, core layer, bearer layer and access layer. It adopts an IMS-based PSTN/ISDN Emulation Subsystem (PES) structure, and in t roduces Access Gateway Control Function (AGCF) to access existing narrowband users. Thus, all narrowband users are controlled by IMS and can enjoy services provided by IMS.

To avoid any impact on existing services, fixed network transformation follows the principle of “introduce first, transform in steps”. New network

costs of controll ing a variety o f d e v i c e s a n d m o d e l s i n a decentralized manner. Some aging switching equipment may also need to be replaced;

■ Diff icul ty of shar ing service capab i l i t i e s among mul t i p l e networks with independent service platforms;

■ G r e a t l y i n c r e a s e d C A P E X and OPEX due to dupl ica ted development of data management and service provisioning in all networks;

■ Network transition difficulty due to decentralized user management. D e v e l o p i n g N G N u s e r s i s problematic due to the difficulty of removing PSTN end offices.

I t i s h a r d f o r e x i s t i n g f i x e d network structures to be developed into integrated, flat, and intelligent structures capable of meeting future full-service demands. Existing fixed networks are incapable of providing integrated services and diverse multi-media services for all network users as softswitches are often inadequate for network evolution. Currently, IP Multimedia Subsystem (IMS) is considered a core control of NGN. Since 3GPP first put forward the IMS concept in R5, and with the subsequent development of IMS technologies, IMS has no longer been a subsystem in the mobile network. Instead, it has extended to the fixed network to become the point of convergence of fixed and mobile networks at the control layer.

IMS has become the best choice for fixed network transformation as its primary standards have basically reached maturity. It is recognized by mains t ream opera tors as the technology of choice for their strategic transformation.

Core Layer

MGCF

Service Layer

AGCF

PSSPES AS SIP AS

IMSHSS

Access LayerSBC

IP PBX

Other Network

PBX

TG/SG

LSLS

MS

PSTN

I/S-CSCF

P-CSCF

AG/IAD

IM-MGW

LAN/xDSL/xPON

IP Bearer Layer


implement unified billing and network management.

■ Phase III: Transform the whole network. All users have access to IMS to enjoy convergent fixed and mobile services.

Z T E ’ s I M S f i x e d n e t w o r k transformation solution addresses operators’ needs for personalized, d iverse , and in tegrated te lecom services, thereby enhancing their value through network transformation:■ It breaks the original coexistence

of multiple networks, and utilizes IMS for unified session control and service triggering. This simplifies network architecture and reduces OAM costs.

■ It establishes a unified user database to facilitate unified phone number distribution, authentication, and service provisioning.

■ It offers multiple access modes and supports a variety of terminal types.

It sets up a unified service platform that allows fast, easy, and flexible service provision.

■ It delivers feature-rich value-added services, such as video, instant messaging and multimedia, which is attractive to users and helps operators generate more revenue.

■ I t p r o v i d e s u n i f i e d n e t w o r k management, service handling, and billing.

■ I t h a s o p e n a n d s t a n d a r d architecture, making it easier for third-parties to deliver diverse services.

■ It helps operators implement end-to-end IP service control, making them controllers of the value chain, rather than mere pipe providers.

■ I t r ea l i zes f ixed and mobi l e convergence, as well as broadband a n d n a r r o w b a n d s e r v i c e convergence. This provides full-service capability for operators, and

improves their competitiveness.

Case StudyAs a leading global provider of IMS

solutions, ZTE has implemented IMS fixed network transformation for many operators around the world.

In 2009, a European operator chose ZTE to help implement its fixed network transformation project. The operator ran both fixed and mobile networks, and its conventional fixed network had a complex structure with PSTN switching equipment supplied by four vendors. Many engineers were being employed for routine network operation and maintenance, which was resulting in high OPEX.

ZTE put forward its total IMS solution—which makes full use of the operator’s existing network facilities. The solution included IMS control layer, service layer, access layer, terminals, and OSS/BSS, and allowed for interoperability between various Private Branch Exchange (PBX) devices (PRI, TRK and SIP interfaces), as shown in Figure 2. In addition to original network capabil i t ies, the operator could deliver diverse integrated services such as One Number and Converged Centrex, to enrich user experience. This successful IMS-based fixed network transformation put the operator on the road to fixed and mobile convergence.

ZTE has taken an active role in trialing and commercializing IMS for leading operators around the world. It continues to explore and leverage the great advantages of IMS for fixed network transformation. With the rise of global IMS markets, ZTE IMS-based fixed network transformation will continue to be an effective tool for fixed operators to transform their existing PSTN networks. Figure 2. ZTE PBX access solution for fixed network transformation.

Core Layer

MGCF

AGCF

IMS HSS

Access Layer

IP PBX

AG/IAD

SBC

TG/SG

TDM PBXTDM PBX

I/S-CSCF

P-CSCF

IM-MGW

TDM PBX

IP Bearer Layer


and WiFi. ZTE’s IMS-based integrated VCC

solution implements the standard Dual Radio Voice Call Continuity (DR-VCC) procedure with the assistance of SCP. When some SCP functions are integrated into the VCC AS, deployment of the DR-VCC procedure can be simplified. With the help of Enhanced MSC, MME, and terminals, IMS-based integrated VCC supports SRVCC―which can initiate service handover from the LTE network to CS network.

As a key part of ZTE’s end-to-end IMS solution, IMS-based integrated VCC not on ly prov ides se rv ice continuity during the handoff among different IMS access modes, but also meets the need for VoIP functions in the initial stage of LTE deployment. For operators, it serves as an important m e a n s o f o f f e r i n g d i v e r s e a n d differentiated services, and offering users a seamless and high quality experience.

for Multiple Scenarios

Service Continuity Need for Network Convergence

IM S s u p p o r t f o r F i x e d a n d Mobi le Convergence (FMC) helps operators explore market

opportunities while removing the gap between wired and wireless networks. In fixed and mobile networks, FMC aims towards network convergence, equipment convergence, and service convergence, offering a seamless service experience to enterprises and individual users. With the increasingly expansion of WiFi networks and the introduction of dual-mode terminals capable of automatic handover between WiFi and cellular GSM/UMTS/CDMA networks, the key enabling technologies for FMC is to ensure service continuity between fixed and mobile networks.

The solution to IMS Voice Call Continuity (VCC) involves dual-mode terminals gaining access either through the Circuit Switched (CS) domain (GSM/UMTS/CDMA) or the IMS system. When choosing access through the IMS system, the dual-

mode terminals can flexibly select the CS domain or IMS domain to establish call connection, achieving seamless bidirect ional handover between different domains based on the relative policies. As a key application of the IMS-based FMC, VCC allows end users to enjoy a seamless service experience. With the access agnostic feature, IMS-based VCC enables different terminals (mobile, fixed telephones, and PCs) to implement seamless voice or multimedia service handover.

Service Continuity Need for Network Evolution

With the increase of real-time mobile services, such as video telephony and video conferencing, subscribers expect high-quality services through mobile terminals anytime and anywhere. Combining mobile and broadband wireless access technologies, LTE networks feature higher capacity, higher spectrum efficiency, and lower latency, thereby providing users with broadband

mobile access and better service experience. However, due to coverage and investment protection in the initial stage of deployment, LTE networks will co-exist with 2G/3G networks and voice services will remain dominant in the network. Therefore, maintaining service continuity―especially voice call continuity when subscribers roam between the LTE and 2G/3G networks―has become a major issue.

Single Radio Voice Call Continuity (SRVCC) offers LTE/IMS-based voice service within the LTE coverage area, and CS-based voice service outside the LTE coverage area. When moving out of the LTE coverage area, a user’s voice must be passed smoothly from LTE to CS network, and network upgrade should be kept to a minimum. With SRVCC, an Enhanced MSC is employed alongside the MME in the LTE network, and a Session Continuity Control Application Server (SCC AS) in the IMS network is used for handover between CS and IMS. In this way, voice call continuity between the IMS and CS

By Zha Dunlin

based integrated VCC solution for multiple scenarios (see Figure 1). It is a complete and open solution in line with 3GPP and 3GPP2 standards. Moreover, it enables dual-mode terminals to support two-way handover between a variety of IMS access modes, such as GSM/UMTS and WiFi, and CDMA

domains can be maintained without the need to upgrade all existing MSCs.

ZTE’s IMS-Based Integrated VCC Solution for Multiple Scenarios

As a leading global supplier of end-to-end IMS equipment, ZTE has been committed to developing an IMS-

Figure 1. ZTE’s IMS-based integrated VCC solution.

Service Continuity Solution

ZXUN HSS/HLR/AAA/SPR

SS

SS

S

S

SS

ZXUN xGW

GGSN PDSNSGSN

MME

ZXUN iMAC

AGW ePDG

LTE

BGCFAGCF

MGCF

MRF MGW

ZIMSService Platform

MSCS MSCe

MGW

CDMA 1X

Enhanced MSC

GPRSHSPA

CDMA EV-DO

WiMAX WLAN

GSMWCDMA

ZIMS ZXUN RCP

SAE-GW

ZIMSSession Controller

E-CSCF

I/S-CSCF

P-CSCF

ZIMS Media Plane processor

S

SCP IM-SSF

OSA-SCS

SIPAS

ZTEVCC AS

FocusFocus


and WiFi. ZTE’s IMS-based integrated VCC

solution implements the standard Dual Radio Voice Call Continuity (DR-VCC) procedure with the assistance of SCP. When some SCP functions are integrated into the VCC AS, deployment of the DR-VCC procedure can be simplified. With the help of Enhanced MSC, MME, and terminals, IMS-based integrated VCC supports SRVCC―which can initiate service handover from the LTE network to CS network.

As a key part of ZTE’s end-to-end IMS solution, IMS-based integrated VCC not on ly prov ides se rv ice continuity during the handoff among different IMS access modes, but also meets the need for VoIP functions in the initial stage of LTE deployment. For operators, it serves as an important m e a n s o f o f f e r i n g d i v e r s e a n d differentiated services, and offering users a seamless and high quality experience.

for Multiple Scenarios

Service Continuity Need for Network Convergence

IM S s u p p o r t f o r F i x e d a n d Mobi le Convergence (FMC) helps operators explore market

opportunities while removing the gap between wired and wireless networks. In fixed and mobile networks, FMC aims towards network convergence, equipment convergence, and service convergence, offering a seamless service experience to enterprises and individual users. With the increasingly expansion of WiFi networks and the introduction of dual-mode terminals capable of automatic handover between WiFi and cellular GSM/UMTS/CDMA networks, the key enabling technologies for FMC is to ensure service continuity between fixed and mobile networks.

The solution to IMS Voice Call Continuity (VCC) involves dual-mode terminals gaining access either through the Circuit Switched (CS) domain (GSM/UMTS/CDMA) or the IMS system. When choosing access through the IMS system, the dual-

mode terminals can flexibly select the CS domain or IMS domain to establish call connection, achieving seamless bidirect ional handover between different domains based on the relative policies. As a key application of the IMS-based FMC, VCC allows end users to enjoy a seamless service experience. With the access agnostic feature, IMS-based VCC enables different terminals (mobile, fixed telephones, and PCs) to implement seamless voice or multimedia service handover.

Service Continuity Need for Network Evolution

With the increase of real-time mobile services, such as video telephony and video conferencing, subscribers expect high-quality services through mobile terminals anytime and anywhere. Combining mobile and broadband wireless access technologies, LTE networks feature higher capacity, higher spectrum efficiency, and lower latency, thereby providing users with broadband

mobile access and better service experience. However, due to coverage and investment protection in the initial stage of deployment, LTE networks will co-exist with 2G/3G networks and voice services will remain dominant in the network. Therefore, maintaining service continuity―especially voice call continuity when subscribers roam between the LTE and 2G/3G networks―has become a major issue.

Single Radio Voice Call Continuity (SRVCC) offers LTE/IMS-based voice service within the LTE coverage area, and CS-based voice service outside the LTE coverage area. When moving out of the LTE coverage area, a user’s voice must be passed smoothly from LTE to CS network, and network upgrade should be kept to a minimum. With SRVCC, an Enhanced MSC is employed alongside the MME in the LTE network, and a Session Continuity Control Application Server (SCC AS) in the IMS network is used for handover between CS and IMS. In this way, voice call continuity between the IMS and CS

By Zha Dunlin

based integrated VCC solution for multiple scenarios (see Figure 1). It is a complete and open solution in line with 3GPP and 3GPP2 standards. Moreover, it enables dual-mode terminals to support two-way handover between a variety of IMS access modes, such as GSM/UMTS and WiFi, and CDMA

domains can be maintained without the need to upgrade all existing MSCs.

ZTE’s IMS-Based Integrated VCC Solution for Multiple Scenarios

As a leading global supplier of end-to-end IMS equipment, ZTE has been committed to developing an IMS-

Figure 1. ZTE’s IMS-based integrated VCC solution.

Service Continuity Solution

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As China’s leading mobile o p e r a t o r, C h i n a M o b i l e boasts the largest network

and subscriber base in the world. It was granted a fixed network license in 2008, and has since become a full-service operator delivering both fixed-line and mobile services.

Although China Mobile has secured the leading position in China’s mobile business, it falls behind in the home and enterprise user markets due to its lack of fixed network resources and the absence of a mature business brand.

Faced with new competition, China Mobile began to implement full-service operation in four ways: accelerating IP network transformation, expanding wireless coverage, extending optical fiber for transmission between base stations, and deploying an IMS-based network. It now aims to deliver fixed voice and multimedia services to individual and enterprise users over IMS, and finally, to build an IMS-based Fixed and Mobile Convergence (FMC) network.

Initial StepChina Mobile initiated the project of

constructing an IMS-based converged office communication network in late 2006, with the view of creating a new

business mode for the enterprise user market. Ranking first in comprehensive strength among nine comparable vendors, ZTE was chosen as China Mobile’s exclusive partner to build the network.

After completion, China Mobile’s I M S - b a s e d c o n v e r g e d o f f i c e c o m m u n i c a t i o n n e t w o r k h a d a subscriber base of over 150,000 and could support more than 60,000 calls and 200 multi-party conferences daily. With abundant customization options, the network offered nearly 300 custom-made services including MMTel, Converged Centrex, Converged One Number, Multimedia Ring Back Tone (MRBT), and Multimedia Conference. Personalized customization at the client level also helped China Mobile form its own business brand “SEECOOL”.

T h e p r o j e c t s u c c e s s f u l l y demonstrated how IMS could support converged communications, and in this way, China Mobile’s IMS-based business mode for enterprise users was formed.

Further Success Following the successful application

of the IMS-based converged office communica t ion ne twork , China

Mobile developed the IMS-based converged High Definition (HD) video conferencing service to meet the needs of modern enterprises for high-definition, large scale conference systems in office communications. The service leverages the benefits of IMS access independence and multimedia service support in order to extend corporate conferences to the Internet and mobile networks. Therefore, u s e r s c a n a c c e s s c o n f e r e n c i n g sys tems anywhere and any t ime using their fixed phones, mobile phones, PCs, or professional video conferencing terminals. Furthermore, the conferencing system significantly reduces construction and operation costs as it is integrated into China Mobile’s mature IMS-based converged office communication network, and is managed by the unified IMS-based O&M system.

C h i n a M o b i l e ’s I M S - b a s e d converged HD video conferencing system is the first of its kind in the industry to be commercially available, covering over 100 nodes in China Mobi le Headquar te rs and in i t s domestic and overseas branches. Since it was put into operation, the system has been running stably and reliably on

By Li Na

China Mobile :Driving Full-Service Operation Through Innovation

FocusFocus

1�ZTE TECHNOLOGIESApril 2010

3G mobile phones using the RCS standards. Through the IMS, these mobile phones offer feature-rich 3G value-added services, such as converged messages and video sharing.

■ Service convergence: The network p r o v i d e s m o b i l e a n d f i x e d -line subscribers with a seamless FMC experience. For example, Converged One Number supports one phone with many numbers or one number for many phones; Converged Centex enables speed dialing among different types of terminals (mobile/fixed terminal and soft client); and the IMS Converged HD Multimedia Video Conferencing System allows users to access the Internet or mobile networks for the purpose of attending business

the network. It has been successfully used by China Mobile for important conferences such as the Spring Festival mass greet/meeting, long-distance job recruitment, and board meetings. This has greatly enriched the application scenarios of IMS-based converged office communications network.

Innovation-Driven Full-Service Operation

To boost service competitiveness, China Mobile has to leverage its advantages and expand mobile business into the fields of broadband Internet, Customer Premises Network (CPN), and fixed-line VoIP. For this reason, China Mobile actively utilizes IMS to achieve convergence of 3G and full-service networks.

By combin ing the bandwid th advan tage o f 3G (TD-SCDMA) wireless data with IMS multimedia service provision capabilities, ZTE h e l p e d C h i n a M o b i l e d e p l o y a 3G-oriented IMS full-service network that featured a converged network, terminals, and services (see Figure 1). ■ N e t w o r k c o n v e r g e n c e : O n

September 3, 2009, China Mobile delivered the industry’s first IMS Centralized Services (ICS) call over its 3G-oriented IMS full-service network. A new network element, mAGCF, was introduced that enabled IMS to ac t as a unified control that could provide multimedia telephony to all users (including users of CS domain) with minimal impact on the existing network. Therefore, users could enjoy seamless service experience without changing their mobile phones.

■ Terminal convergence: China Mobile embedded IMS converged communications software into its

meetings anytime and anywhere using their fixed phones, mobile phones , PCs, or profess ional conferencing terminals.

The network offers personalized service portals for individual, home, and enterprise users, and this facilitates l a y e r e d b u s i n e s s m a n a g e m e n t . Operators can open their accounts through the operator portal, while enterprise users can customize their Colorful Ring Back Tone (CRBT) through the enterprise portal.

As a leading IMS provider, ZTE has been the key partner of China Mobile in its IMS implementation. With its comprehensive strength, ZTE will help China Mobile dominate the 3G and full-service market by pushing forward the implementation of IMS full-service strategy.

Figure 1. China Mobile’s 3G-oriented IMS full-service network.

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CM-IMS: China Mobile’s IMS ; CMNET: China Mobile’s IP Bearer (GoTone/M-ZONE, iHOME, and i-POWER are well-known brands launched

by China Mobile for individual, home and enterprise users respectively)


FocusFocus

IMS Deployment

In phase I, ZTE delivered the IMS core network, service platform, DWDM transport network, and Multi-Protocol Label Switching (MPLS). Its IMS core network interworked with Motorola’s WiMAX network. This phase was completed in June, 2009 and the total number of subscribers is now more than 100,000. At that point, Atheeb was the first operator to start IMS network deployment and commercial operation among the three new fixed-line operators in Saudi Arabia.

Phase II construction started shortly after the completion of Phase I. In this phase, ZTE’s WiMAX network was under construction in other cities and these will be interconnected with the ZTE IMS core.

Highlights of Atheeb’s IMS Network■ Advanced network architecture

realizes future-proof developmentAtheeb’s IMS network is a true

and pure IMS network, compliant

quality of telecommunications service, the Communications and Information Technology Commission (CITC) of Saudi Arabia decided to introduce competition in the fixed-line market by issuing three new fixed-line licenses. Atheeb acquired a 3.5GHz WiMAX wireless spectrum and fixed-line license.

With its expansive land mass and sparse population, the market for wireless broadband access in Saudi Arabia is very significant. Aiming to seize upon this market opportunity, Atheeb quickly began the process of selecting an equipment supplier. After a tough evaluation process, in March 2008, Atheeb selected ZTE as its IMS partner to implement system integration of the whole network. ZTE’s IMS, with its SIP-based networking and access agnostic features, was the best choice for Atheeb in its goal of converging multiple access technologies (including WiMAX, xDSL, and xPON).

Ethiad Atheeb Telecom (Atheeb) is the second largest fixed-line operator in the Kingdom of

Saudi Arabia. It acquired its license in 2007, and holds a 3.5GHz spectrum across 13 regional divisions within the Kingdom. Atheeb’s licence permits fixed and wireless services such as voice telephone communications, data services, internet services, and broadband in ternet services v ia WiMAX 802.16e technology.

Efficiency and Speed Make No.1Saudi Arabia is one of the most

important telecommunications markets in Middle East, and three main players dominate there: Saudi Telecom (STC), Mobily, and Zain. While mobile penetration in Saudi Arabia is more than 100%, broadband penetration is less than 10%.

Prior to 2007, Saudi Telecom was the sole fixed-line operator in Saudi Arabia. However, in order to improve the

IMS Deploymentin the Kingdom of

Saudi ArabiaBy Shi Wei

High Efficiency Delivery of Multimedia Broadband ServicesBy Zhang Weiqing


■ A large-capacity geographical redundancy solution ensures network stability and operation

Atheeb’s IMS network is designed w i t h a c o m p l e t e g e o g r a p h i c a l redundancy solution supporting a capacity of 650,000 subscribers. Two sets of IMS core equipment are deployed separately in two cities―Riyadh and Jeddah . Al l boa rds implement 1+1 backup, and these measures ensure high reliability of the network at interface, board, and element levels. The system’s reliability reaches 99.999%. ■ The implementation of cutting-

edge technologies provides a mature and operational network

With ZTE’s strong implementation capabilities, Atheeb’s IMS network features seamless integrat ion of ZTE IMS core network, Motorola’s WiMAX system, and WIPRO’s OSS/BSS. Other leading functions such as online charging, lawful interception, and emergency call, have also been implemented. Together these guarantee the network is quickly put into real operation.■ R i c h s e r v i c e s a n d o p e n

service environments enhance competitiveness

Atheeb’s IMS network is designed to offer abundant multimedia broadband services, including Video Telephony, Video Conferencing, Multimedia Ring Back Tone, Voice Mail, One Number, and Centrex. Rich services help Atheeb to flexibly design service bundles oriented to individual, home, and enterprise users.

In addition, the network provides standard and open interfaces to realize fast integrat ion with third-party services. This further assists Atheeb to generate revenue through rich services.

whole network and decreases TCO). The system provides excellent VoIP experience, Video Telephony, and other multimedia services at low cost and with high QoS.

with the standard definition. This architecture allows Atheeb to use multiple access technologies based on the unified IMS core network (which ensures sustainable development of the

Figure 1. Atheeb’s IMS network architecture.

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FocusFocus

By Shi Wei

implement in a common way, thereby making interoperability easier between them and between the technological components of different vendors.

RCS: Direct Benefits for End UsersRCS i s impor t an t because i t

represents an attempt to bring features and functionalities offered in the IP world into mobile telecom services. As such, it is more significant in enhancing the end-user experience than all access-oriented convergence initiatives.

From the end-user’s perspective, RCS Release 1.0 provides three services:■ Enhanced phonebook: enables users

to see the presence status of people in their normal mobile contacts list, and the available methods to contact them.

■ Enhanced messaging: adds IM functionality and conversational m o d e l s t o e x i s t i n g m o b i l e messaging capability.

RCS: Not Just a Standard or Set of Services

IIt is perhaps easier to define RCS by what it is not rather than by what it is. RCS is not a formal

or technical standard, but is more commonly referred to as an “initiative” or “industry effort.” According to the GSMA’s RCS initiative, it is neither a set of applications nor a set of services, but a framework for enabling services. Furthermore, although the RCS framework is managed in a similar way to a standard, it is based on existing standards and specifications. In the case of Presence, for example, it uses the framework of OMA Presence SIMPLE 1.1. RCS is closely bound up with the IMS architecture, and is sometimes offered as a partial answer to the question “what is IMS good for?” For ZTE—particularly in relation to its IMS—RCS is intended to be a set of defined IMS-based services which mobile operators can

Rich Communication Suites:

■ Enriched call: allows sharing of multimedia content during a call, including sharing of video files and real sightseeing.

RCS Release 2.0 (already being discussed although not yet completed) will add a PC client to allow PC-to-mobile and perhaps even PC-to-PC communications. Whether this will require a SIM card to be physically attached to the PC, as in the model used by existing services Unik and Outsmart’s Plug‘n’Talk , is yet to be decided.

RCS: Emphasis on Operators’ Key Assets

The greatest concern for operators about RCS is that efforts to encourage the take-up of mobile data services th rough a t t rac t ive ta r i ff s could have a negative impact on mobile voice revenues. However, at present there seems little to worry about. The experience of IP based voice

A Significant Convergence Initiative


segment. Simultaneous SMS and IM conversations are well established patterns of behavior among these younger users, and a well designed PC client for RCS should go a long way towards making ZTE RCS services “sticky”.

More than RCSZTE an t ic ipa tes RCS wi l l be

success fu l in the mass marke t , and three operators in France have already started working together to deploy interoperable services. ZTE is striving towards the development of RCS services based on standard RCS releases announced by the GSM Association. These are supported by more than 50 major te lecom compan ie s . ZTE’s s e rv i ce s a r e currently at the stage of development between releases 1.0 and 2.0, and the company has a clear roadmap leading to the release of RCS 3.0. Besides standard services, ZTE also provides converged Centrex, converged One Number, and Teleconferencing. The company is proud of the fact that it not only provides RCS, but also supports service customization.

Service application is everythingZTE RCS is far from being superficial.

Along with entertainment and game based RCS applications, ZTE RCS also offers some interesting initiatives using some familiar features for business purposes.

ZTE has been cooperating with many operators in the RCS field. While RCS is aimed squarely at younger consumers, it should be noted that much of this cooperation has focused on business services. ZTE is now looking beyond the teenage market with its pre-RCS service, and may soon be considering business-oriented propositions.

authentication infrastructure. Some have suggested that the integration of voice serv ices in to In ternet applications such as social networks will be the real battleground, and that enhanced telephony and messaging services offered by RCS are simply another―albeit slightly wider―silo.

ZTE RCS: Prospects for Success ZTE RCS and communication behaviors

The current success of Internet telephony, IM, and communications embedded within other applications is evidence that ZTE RCS is at least merging in the right direction. Indeed, nowadays an increasing number of enterprise telephony and desktop software vendors are showing their faces in public with the ZTE unified communication strategy.

ZTE RCS is targeted primarily at younger consumers, who are both keen and able to handle multiple communica t ion channe l s a t the same time. In developed markets, further integration with PC clients is likely to be important to this market

applications such as Skype, Google Voice, or Google talk shows that RCS can best be understood as something of a pre-emptive strike by the traditional mobile players against this potential future, and its purpose somewhat evaluative. At best, mobile operators hope that they can cash in, at worst, that they can stem the growth of such IP based voice applications. As RCS stands for a new revenue model, ZTE foresees the benefits of transmuting mobile voice into IP data applications.

RCS services are addressed using the traditional telephone number, and by attaching more advanced services to mobile numbers, it plays to the operator’s strengths―that is, the unique relationship that users continue to have with their mobile number. RCS services enable the mobile number to function across both traditional and IP services. In this sense, RCS is a more genuine form of convergence than many of the Fixed and Mobile Convergence (FMC) services which have hitherto been launched.

RCS identifies the operator’s key assets―the telephone number and

Figure 1. ZTE RCS on ubiquitous networks.

A Significant Convergence Initiative

■ Converged communication for fixed/mobile, converged application for IT/CT■ Flexible QoS control■ Abundant 3rd terminal (excellent interoperability)■ Carrier-grade ATCA platform

Rich Call Rich Phone Book Web Integration OthersRCS Middleware (Enabler)

Symbian Windows Windows Mobile Linux Android Mac OSHandset/PDA PC Fixed Phone Set-Top Box

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Sharing Service ContinuityWeb Call

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More revenue by increasing PS traffic

Enhanced end-user experience


Third Eye

ZTE, a leading global provider o f t e l e c o m m u n i c a t i o n s e q u i p m e n t a n d n e t w o r k

solutions, announced the launch of its next generation IMS 6.0 solution. The IMS6.0 solution is based on operators’ feedback and designed to meet the requirements of next generat ion networks such as LTE.

With increased consumer demand for ubiquitous high-bandwidth services, operators are looking to provide users with higher performance, greater bandwidth and broader network coverage while maintaining control of revenue. ZTE’s IMS 6.0 solution offers a variety of multimedia solutions critical to deploying a successful LTE network: Converged Conference, Tele-presence, Surveillance, Gaming, Streaming and Rich Communication Suite (RCS).

ZTE’s IMS 6 .0 so lu t ion a l so provides enhanced pol icy-based resources and charg ing con t ro l funct ional i ty to a l leviate issues

associated to increased traffic. It supports user-based and service-based QoS policy controls. Flexible QoS policy control enhances the value of every byte to guarantee high service quality and user experience.

For fixed and full-service operators, the evolution of the traditional fixed network has become a focus, since legacy switches have high maintenance costs and are not able to support new services. ZTE’s IMS 6.0 solution offers an enhanced version of ZTE’s Access Gateway Control Function (ZXUN xAGCF), which is the core network element in the PSTN/ISDN emulation. ZXUN xAGCF supports a variety of legacy interfaces including POTS, V5, ISDN BRI/PRI, H.323, and supports the seamless integration of current OSS/BSS, integrating with existing services and providing a consistent user experience.

“The overall objective of next-generation network construction is to build a unified network,” said Wang Xiaoqiang, general manager of ZTE’s

IMS product line. “This phase will bring collaborative development in network scale, security, mobility, management, quality of service, and service innovation. ZTE’s IMS 6.0 solution deploys some of the most cutting-edge technologies―cloud computing and distributed design―to reduce network complexity, improve system robustness and increase the efficiency of building networks with the lowest possible TCO to go through the critical transformation period.”

ZTE is one of the few vendors to provide end-to-end IMS solutions. In 2009, ZTE successfully placed the world’s first IMS Centralized Services (ICS) call with the industry’s first commercial IMS-based High Definition (HD) video conferencing system. As one of the global leading IMS suppliers, ZTE ranks first with large-scale commercial deployments in the Chinese market, and has established extensive cooperation with leading European and American operators.

February 9, 2010 Source: totaltele.com

ZTE to Launch IMS 6.0 Solution for LTE Networks


ZTE to Launch IMS 6.0 Solution for LTE Networks February 2010, selected from the global-growth consulting firm Frost & Sullivan

Global GSM Incremental Market Analysis

GSM subscriber base in the United Kingdom is still increasing, and the number of total subscribers is likely to increase from 75.9 million in 2008 to 78.0 million in 2010, with wireless penetration expected to reach 126% in 2010.China

At the beginning of 2009, 3G licenses were issued to three main carriers in China. By the end of 2009, China had 67.3% of mobile penetration rate. With a population of 1.34 billion, China’s mobile market looks promising for the next three years.India

India is one of the most important GSM markets at present, and nearly all of the top GSM equipment providers are focusing on this emerging market. GSM mobile carriers in India added 9.32 million new subscribers in June 2009, which is a good improvement over the 8.93 million subscribers added

Overview of Global GSM MarketGlobal GSM market development

GSM continues to drive mobile subscr ipt ions’ growth in major markets. Global GSM

accounts for 83.5% of global mobile subscribers and this preponderant proportion has retained for a long time. The scale economies effect of GSM could not be changed till 2014. With the rich application of 3G, the share of GSM subscribers is likely to decrease to 56.4% by the end of 2013.

Tr a d i t i o n a l G S M e q u i p m e n t providers, such as Ericsson, NSN, and ALU, dominate mature market. Asia Pacific and Europe are the largest markets for GSM, both in terms of equipment and subscribers.

From the technological perspective, global GSM networks operate in a number of different frequency ranges (classified as GSM frequency ranges for 2G and UMTS frequency bands for

3G). Most 2G GSM networks operate in the 900MHz or 1,800MHz bands. North American countries (including Canada and the United States) use the 850MHz and 1,900MHz bands, because the 900MHz and 1,800MHz frequency bands were already allocated. Most 3G GSM networks in Europe operate in the 2,100MHz frequency band.

GSM market development in major regionsEurope

Europe was the first to develop and launch GSM, and currently enjoys its widest applications. It should be noted that mobile carriers perform very differently in the licensed markets of western Europe, despite similar framework conditions on both the supply and demand sides. For example, top five UK GSM carriers are 3 UK, Orange, T-Mobile, Telefonica O2, and Vodafone.


and traditional providers, such as Ericsson, NSN, Alcatel-Lucent did not register much growth in market share.

Case study of emerging equipment providers

Under current market scenario, emerging providers such as Huawei and ZTE display great competitive strength, as their R&D and manufacturing activities are centered in the developing countries and they undertake flexible localized operation. Thus, they are poised to get much more shares in the newly added markets and are to enter the high-end market.

For example, ZTE shows about 120% growth rate per year from 2005 to 2009 and shipped 750,000 TRXs in 2009 (see Figure 3). ZTE is partnering with industry-leading carriers including C h i n a M o b i l e , C h i n a U n i c o m , Reliance, Etisalat, Telenor, Telstra, Teliasonera, Singtel, Sonaecom and Hutchison.

ZTE’s GSM products have been in more than 70 countries and regions, more than 100 network operators to deploy. ZTE is serving 420 million subscribers worldwide.

Third Eye

in April 2009. The strength of different Indian GSM carriers vary significantly, the total market share of top three GSM carriers reaches 67% of the total market.

Competitive Analysis of GSM Incremental Market in 2009Market share analysis of global GSM incremental market

As seen in Figure 1, global GSM shipments increased from 2,600k TRXs to 3,438k TRXs, with 5.5% yearly growth rate. Although the GSM shipments in 2008 and 2009 were less than before, the overall GSM market was growing in the last five years. It can be expected that the GSM shipments will continue to rise in next four to five years.

Tr a d i t i o n a l G S M e q u i p m e n t providers, such as Ericsson and NSN, gradually compete in more mature markets for better profitability. As compet i t ive t e lecommunica t ion equipment vendors, Huawei and ZTE have been growing and building their presence in emerging and mature markets with innovative products and network delivery capacity.

In the mature market, GSM carriers

have been providing 3G service for several years. The market is characterized by fierce competition and increased demand for data services from subscribers. Apart from looking for new customers, retaining existing GSM customers for carriers in mature market is also important. In Western Europe, as a mature market, and GSM carriers are looking at value-added services through better groups of killer applications. Mature market is considered as saturated market, especially in Western Europe, where GSM carriers are constantly looking for new ways to differentiate themselves from their competitors.

In the emerging market, GSM c o n t i n u e s t o p r o m o t e m o b i l e subscriptions growth, with market share rising by the end 2007 in Brazil to 76.5% (63.1% in end-2006), in China 91.9% (91.5% in end-2006), in India 78.9% (76.7% in end-2006) and in Russia 99.3% (99.1% in end-2006).

As seen in Figure 2, the incremental GSM markets experienced significant changes, while emerging providers, such as Huawei and ZTE, increased their market shares by the end of 2009,

Figure 1. Global GSM market share by shipments (k TRX). Figure 2. Total GSM market: incremental shipments by GSM vendor (world), 2009.

Source: Frost & Sullivan China Source: Frost & Sullivan China

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GSM to EDGE would be smoother and less expensive, as most of the mobile subscribers are using GSM and a majority of them do not want to change their phone numbers or phones immediately.

■ In the high-end market of developed countries, Huawei and ZTE are taking advantages of low-cost and customized applications to seek market opportunities and demonstrate their competitive strength.

■ In the low-end market of the developing countries, the emerging providers, Huawei and ZTE have many advan t ages , i nc lud ing localized operation, customized invention, and relatively low TCO. They are likely to seek more market opportunities and demonstrate their competitive strength.

■ Emerging markets, such as China, India, and African countries, are likely to witness an incremental trend of capacity expansion of GSM and EDGE application.

■ Value-added services will attract more subscribers’ attention; primary GSM carriers are accumulating more technologies and capitals to strengthen their profitability.

■ Implementation of innovative technologies such as multi-mode & smooth evolution, energy saving methods, and all IP networking systems drive the GSM market. As one of the few telecom equipment and network solution providers in the industry at present with SDR-based stations that supports these technologies, ZTE shows high competitive strength and is to become one of the top three providers of global GSM incremental market in future.

With deployment of f i rs t All-IP commercial SDR GSM network in Hong Kong, ZTE has completed 200,000 units shipped, as well as high performance and low TCO of the green network delivery by the end of October in 2009.

In 2009, ZTE generated 19.2% market share of incremental market.

GSM Market Forecasts and Opportunity AnalysisGSM market forecasts■ On the basis of a large number of

global subscribers, global GSM market wil l have 500 mill ion subscribers by the end of 2010.

■ In mature market, GSM carriers have been providing 3G service for several years, and this market is likely to grow slowly.

■ Most of competi t ions wil l be experienced in emerging market, such as China, India, and African countries.

■ With regard to Asia Pacific, mobile subscriber base is likely to increase at a stable rate by 2013; as a result, there will be stable demand for GSM

device by 2012.■ In Latin America, mobile subscribers

are expected to reduce further in number as the market shifted from CDMA to GSM.

■ The GSM device price is likely to drop continually and professional maintenance services are expected to gradually gain importance. In particular, GSM carriers will emphasize on complete design ability and provision of customized maintenance services, especially for data business operations.

GSM market opportunity analysisI n f u t u r e , k e y G S M m a r k e t

opportuni t ies wil l focus on two aspects. First of all, more emphasis wil l be laid on the undeveloped markets. Second, the mainstream GSM carriers, especially the EDGE and LTE revolution, will provide increased opportunities.

Wi th respec t to GSM marke t opportunities, following is likely to come true in next four to five years:■ Compared to the transition from

GSM to LTE, the transition from

Figure 3. Global GSM shipment of ZTE (k TRX).

Source: Frost & Sullivan China

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Research Note

By Wu Xiangjun

A Bearer Technology Revolution

Bearer network technologies are currently evolving in two directions: towards voice bearer networks (also cal led t ransport

networks), and towards Ethernet. The former is used to transmit voice services, and is highly manageable and reliable, while the latter is the most widely used LAN technology, featuring fast and easy interconnection. The two technologies have been gradually converging due to the fact that they support and complement each other.

Because voice services have small bandwidth change yet require high reliability in the early stage, Plesiochronous Digital Hierarchy (PDH) and Synchronous Digital Hierarchy (SDH) employ “rigid pipes” to ensure high reliability management. The powerful OAM offers management channels for network protection. However, this brings some disadvantages.

All network interconnections are fulfilled by a centralized network management system, and all Point-To-Point (PTP) service connections are configured manually. Whereas network link failure accounted for in the design can be recovered through carrier-class protection switching in less than 50ms, unexpected link failure may result in service discontinuity. Moreover, when network deployment and service configuration have been completed, the occupied bandwidth cannot be changed or released due to the rigid pipes.

E t h e r n e t s u p p o r t s s i m p l e a n d f l e x i b l e interconnection, but has weak manageability and low accessibility. Therefore, protocols such as STP and RSVP were developed to ensure network reliability and connection efficiency. Without the connectionless feature of Ethernet, the MPLS router (appearing later)

PTN:

2�ZTE TECHNOLOGIESApril 2010

transmission. ZTE has been selected by three

major operators in China to build PTN commercial trials in various Chinese cities. In December 2009, ZTE emerged as the biggest winner in China Mobile’s massive equipment purchases for the roll out of its next generation mobile transport network, garnering a 35% share of the revenue.

On 18 February 2010, the company announced it had signed a contract with Finland-based telecom carrier Finnet Group, becoming an exclusive supplier of a unified multi-service metro bearer solution in three Finnish cities. This marks another successful commercial application of ZTE’s PTN solution in the high-end European market. ZTE has previously implemented a PTN solution for Promonte, a subsidiary of Telenor. The Finnish project will adopt ZTE’s ZXCTN 6100 PTN solution as a means of offering traditional voice services and interconnection over Finnet’s all-IP-networks.

To date, ZTE has expanded its PTN business into many new countries, including Brazil and Montenegro, and has completed the construction and testing of PTN networks for carriers such as Telefornica and T-Mobile.

TDM over package services. This represents a revolutionary change in the deployment, operation, and maintenance of bearer networks.

Additionally, the explosive growth of wireless services has also driven the development of PTN technology. Flexible bandwidth control, service bandwidth assurance, and IP-based features required by wireless services have been the development trend of PTN.

Drawing on in-depth understanding of PTN technology, heavy R&D investment, and a wealth of network construction experience, ZTE has achieved outstanding performance with its PTN products.

In August 2009, ZTE announced the formal launch of its new generation IPTN bearer network solution, designed to meet the needs of IP-based services through mobile backhaul and multi-service delivery. The solution features packet kernelling, enables multi-service delivery, and provides customers with mobile backhaul and fixed/mobile convergence. It also allows customers to cut network construction, operation, and maintenance costs, helps carriers implement smooth network evolution, and fully addresses carriers’ current and future requirements for network

was designed to enhance traffic control and network protection.

PTN leverages the advantages of transport networks, Ethernet, and MPLS routers to enable easy and efficient interconnection between users. It is a manageable and reliable bearer technology offering the bandwidth flexibility to carry multiple services. PTN equipment has the following features:■ Powerful OAM to ensure efficient

ne twork pro tec t ion and h igh reliability;

■ Flexible bandwidth adjustment to raise network bearing efficiency;

■ A wide variety of interfaces to support diverse Ethernet, TDM and ATM services;

■ I t i s l ow-cos t and s imple to implement.

The control and manageability required by telecom networks may affect network simplicity and ease of use, while flexible bandwidth change may increase the complexity in network planning and service reliability. PTN, a connection-oriented transport network technology, has been developed to solve these problems. Based on IP, it is applicable to multi-service environments and is capable of accessing, converging and transporting

Based on IP, PTN is applicable to multi-service environments and is capable of accessing, converging and transporting TDM over package services. This represents a revolutionary change in the deployment, operation, and maintenance of bearer networks.


By Tang Tao

With the deployment and commercial application of HSPA networks worldwide,

mobile broadband data services have become widely available on the global market. As a result, high-rate data services—especially video, music, and games—have begun to place greater demands on the mobile network (for higher rate, larger capacity, and better user experience). The commercialization of HSPA+ and LTE is therefore accelerating in response to this demand. Which strategy is best suited to HSPA+ and LTE evolution is an issue for 3G network planning and construction.

Technical Revolution Brought by HSPA+ and LTE

HSPA+ is the enhanced and evolved version of HSPA. In technical terms, the “+” indicates an improvement

in modulation and antenna, among other things. As a fourth generation mobile technology, LTE is giving rise to greater technical innovation; however, enhancing network capacity and increasing download rate remains a priority for this new technology. On the one hand, HSPA+ and LTE are similar in their ability to enhance rate. On the other hand, their different modes create some differences. HSPA+ and LTE both improve mobile broadband bandwidth significantly—especially LTE, which is comparable to fixed network broadband.

Key techniques to enhance capacity and rate capability

Multiple-Input Multiple-Output (MIMO) is a key technique for HSPA+ and LTE. It uses multiple antennas at both the transmitter and receiver to block the fading channel. This enhances

radio channel capacity and spectrum utilization, improves channel reliability, and reduces bit error ratio. Higher order modulation is another key technique. HSPA+ introduces 64QAM in the downlink (DL) and 16QAM in the uplink (UL). DL/UL peak rates in the cell can reach 21.6Mbps/11.5Mbps.

When both the 64QAM and MIMO are introduced in the DL, the peak rate can reach 43.2Mbps. LTE adopts OFDM modulat ion and supports flexible bandwidth configuration and spectrum allocation. When using 20MHz bandwidth and a 2×2 MIMO antenna scheme, LTE provides date rates of up to 150Mbps in the DL and 50Mbps in the UL.

In addition, Multi-Carrier HSPA (MC HSPA) allows dual-carrier or multi-carrier transmission in both the

Ongoing Development of

3G Networks

Research Note


Ongoing Development of

downlink and uplink. MC HSPA, when combined with 16QAM, 64QAM, MIMO and other techniques, yields peak rates of 23Mbps in the UL and 86Mbps in the DL.

Flat architecture and intelligent networks

In the LTE s tage , the sys tem undergoes some changes. First, the wireless system adopts eNodeB, which integrates the functions of the 3G RNC and NodeB, and significantly improves data processing efficiency. The LTE core network nodes are simplified as well, and a flat network architecture creates improved network performance.

Another innovation brought about by LTE is Self-Organizing Network (SON). Its four key functions: self-configuration, self-optimization, self-heal ing, and mult i -operator

management sharing, are specifically d e s i g n e d t o r e d u c e h a n d s - o n configuration and on-site maintenance, and to decrease O&M costs.

How to Cope with the Coming Era of HSPA+ and LTEIP transformation to cope with data growth

With the deve lopment o f the HSPA market, introducing PC-based data services to mobile terminals has become central to the expansion o f m o b i l e b r o a d b a n d s e r v i c e s . Applications typically found in a fixed data network—such as advertising and searching services—have great profit potential in the mobile broadband market. These services require HSPA+ and LTE network, and should have extremely high data throughput.

First, in HSPA+ and LTE networks, RAN should be IP-based; that is, network elements such as RNC, NodeB, and eNodeB should be constructed on

the all-IP hardware platform. These network elements should provide IP-based interfaces and support IP/ATM protocol stack in their software so that high-rate wireless data services can be carried by the all-IP network.

Second, IP-based t ransport is necessary. LTE is placing higher requirements on the end-to-end delay, so an IP-based transport network should have a flat architecture and higher QoS. Security also poses a great challenge for the IP network. Together, these place new requirements on the design and deployment of the transmission network.

Software upgrade to protect investment

It is true that with the tightening of competition, ARPU is diminishing. When operators construct 3G networks, they need to consider not only the cur ren t t echno logy and se rv ice requirements but also how to protect the existing investment and reduce costs in future evolution. Software upgrade and sharing of hardware platforms are the first step in the evolution of a 3G


the world’s first SDR-based HSPA+ network in March 2009. This all-IP network provides up to 21Mbps download speed and helps CSL deliver a variety of multi-media services including music download, video on demand, and interactive games. In September 2009, CSL announced the commencement of an LTE commercial t r ial network. I t plans a smooth evolution to LTE through simple upgrade and modifications using the SDR base stations supplied by ZTE. 2G/3G/4G networks will be converged into one network.

ConclusionIn the long term, LTE and future

wireless technologies will almost certainly replace current mobile networks. But this is a long process that leaves a wide opening for the development of UMTS networks. HSPA+ will play an important role by virtue of its own advantages. The new generation Uni-RAN solution, represented by ZTE SDR technology, allows multi-mode and multi-band networking. It takes into consideration both the operator’s investment and network evolution strategy, implements smooth network evolution by software upgrade and hardware sharing, enhances network performance and reliability, and helps create a win-win future for both operators and subscribers.

avai lable, a l lowing operators to maximize their profits. The high-rate data capability of HSPA+ also makes possible new IMS-based data services. With a greater variety of terminals coming into existence, users will surely find their favorite services. The initial development of user habits is important for the maturation of LTE, and helps limit operating risks.

LTE will be a primary technology and focus of market development in the future. But at present, and for several years to come, development from HSPA to HSPA+ and then to LTE will be most suitable. The core of this development lies in the initial deployment of HSPA+, and then LTE. Software must be updated first, then hardware; hotspots first, and then the network as a whole.

The deployment of LTE network should proceed as follows: First, deploy LTE on the new 2.6GHz frequency band, making it coexistent with existing 2G and 3G networks. Second, with the gradual migration of users to LTE, build a new LTE network on the original frequency bands of 2G/3G networks. This will form a dual-mode GSM/LTE, dual-mode UMTS/LTE or multi-mode GSM/UMTS/LTE networks. Finally, support multiple network modes via a single radio access network.

Nowadays global high-end operators have begun deploying HSPA+ and LTE networks. CSL, the biggest mobile operator in Hong Kong, launched

network to HSPA+ and LTE. Therefore, during 3G network planning and equipment selection, future evolution strategies and support capabilities should be considered. A long-term plan should be implemented step by step in conjunction with network development.

Win-Win Strategy: HSPA→HSPA+→LTE

LTE is the network of choice for the future. However, because LTE does not support backward compatibility, operators have to outlay large amounts of money to purchase new frequency bands for the deployment of new networks. Moreover, the current LTE industry chain, which includes standard, chip, terminal, and the development of user habits, is not yet mature. 3GPP therefore initiates the development of HSPA+ (the upgraded version of HSPA) even after it has defined LTE as the target of evolution.

HSPA+ delivers functionality and performance similar to LTE, but it has far lower construction costs. There is no need for operators to buy new equipment or frequency bands when deploying HSPA+ in the existing HSPA network. Better network performance and capacity are achievable simply through sof tware upgrade. Data services such as online multimedia (online music, reading, and streaming media) and mobile instant messaging (mobile newspapers and email) become

Research Note

LTE will be a primary technology and focus of market development in the future. But at present, and for several years to come, development from HSPA to HSPA+ and then to LTE will be most suitable.


2 March 2010, Shenzhen, China — ZTE announced an optical transmission agreement with Optimus, a Portuguese communication services provider. ZTE will build a long-haul optical transmission network for Optimus to connect Lisbon, the capital of Portugal, with Porto, the country’s second largest city.

The new Optimus network will be based on ZTE’s ZXWM M920 solution, a next generation intelligent optical

networking product that combines high-capacity and long-haul t ransmiss ion c a p a b i l i t i e s . T h i s network will be replacing cu r r en t i n f r a s t ruc tu re a s Optimus’ legacy equipment can no longer meet the requirements of an ever-increasing customer base and growth in data traffic.

News Brief

ZTE to Build 40G Long-Haul Backbone Network for Portugal’s Optimus

15 March 2010, Shenzhen, China ― ZTE announced that the World Intellectual Property Organization (WIPO) has released international (open) patent application figures for 2009. China came 5th on the ranking list, one place up from 2008, with a rapid increase in patent applications. ZTE increased its patents filed by 50% in 2009, as the number of WIPO applications worldwide drop for the first time in 30 years.

ZTE led many major companies in intellectual property in 2009, with a substantial increase in global patent applications. WIPO data show that ZTE’s international open patent applications reached 502 in 2009, 173 more than in 2008. ZTE actually applied for 1,164

international patents in 2009, and many are still being processed by WIPO.

Company is committed to investing in and developing innovative products to meet market needs

ZTE Increases Patents Applications by 50% in 2009 Against Global Drop in Patent Applications


News Brief

22 March 2010, Shenzhen, China — ZTE launched its ZXSDR R8880, the world’s first CDMA/LTE dual-mode Remote Radio Unit (RRU). ZTE’s ZXSDR R8880 dual-mode RRU currently supports 700MHz and Advanced Wireless Services (AWS) spectrum band.

In addition to 700MHz and AWS, the

R8880 also supports CDMA2000 1X, EV-DO and LTE networks simultaneously, a key functionality as the industry moves toward CDMA and LTE network convergence. In the CDMA arena, it supports Two Transmit Two Receive (2T2R) and LTE Multiple Input Multiple Output (MIMO) technologies as well. Based on the widely commercialized ZTE Soft Defined Radio (SDR) platform, the R8880 can improve the speed of network deployment and significantly reduce a network Total Cost of Ownership (TCO).

“We are seeing most North American CDMA operators opt for CDMA and LTE dual-mode networks, with AWS and 700MHz the most commonly used spectrum sources,” said Ms. Li Jian, General Manager of ZTE’s CDMA Product Line. “ZTE is addressing this market development by offering the R8880 as part of our leading UniRAN (Unified RAN) solution and helping North American tier-one CDMA operators move towards 4G.”

ZTE Launches World's First CDMA/LTE Dual-Mode Remote Radio Unit

23 March 2010, Shenzhen, China and San Diego — ZTE, a leading global provider of telecommunications equipment and network solutions and Qualcomm, a leading developer and innovator of advanced wireless technologies, products and services, announced they have entered into a development agreement around femtocell technology. The terms of the agreement allow ZTE to access Qualcomm’s Femtocell Station Modem™ (FSM™) chipset platform in order to develop CDMA2000® femtocell products.

The unprecedented growth in mobile data consumption, driven by smart phones and other data intensive devices has created the need for improved coverage and increased data throughput for subscribers. Up to 70% of wireless data originates indoors and femtocells allow operators to target areas where the solution is needed. Qualcomm’s FSM platform features flexible and fully integrated System on Chip (SoC) solutions consisting of baseband, RF and power management ICs coupled with commercial grade software, resulting in femtocells with the low power consumption and high levels of integration. This technology will allow operators to improve coverage, add capacity, increase data throughput and enhance the end user’s wireless experience while reducing operating costs in supporting mobile broadband applications.

ZTE to Develop CDMA2000 Femtocells Based on Qualcomm System on Chip Solutions

11 March 2010, Shenzhen, China — ZTE announced it successfully completed the first EV-DO Rev.B Phase II data call with a download rate of 14.7Mbps, making ZTE the first in the industry to introduce EV-DO Rev.B Phase II technology. ZTE introduced the world’s first 9.3Mbps EV-DO Rev.B Phase I system last year.

EV-DO Rev.B technology enhances spectrum efficiency to extend mobile talk-time by approximately 30% and effectively prolong standby time. A new baseband chip is also adopted in the Rev.B Phase II system. By introducing 64QAM high-order

modulation technology, it supports a single carrier frequency with a downlink speed of 4.9Mbps and with 3-carrier frequency bundling technology, it achieves a peak rate of 14.7Mbps.

Currently, leading global operators have launched EV-DO Rev.B networks, including China Telecom, WANA, Smart Telecom and PTCL. To upgrade 9.3Mbps Phase I networks to 14.7Mbps networks is simple and straightforward, requiring only a baseband channel board replacement and a software upgrade.

ZTE Realizes the World's First 14.7 Mbps EV-DO Rev.B Data Call

ZXSDR R8880


�0 ZTE TECHNOLOGIES April 2010

ZTE Announces 2009 Annual Results - zte-deutschland.de€¦ZTE Announces 2009 Annual Results 9 April 2010, Hong Kong ― ZTE Corporation (“ZTE” or the “Group”) today announced

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