News Brief

ZTE Announces 2010 Interim Results Revenue reaches USD 4.524 billion European and US revenue increases by 45%

ZTE Corporation (“ZTE” or the growth in the Group’s domestic business European carriers, including KPN, “Group”) announced on August revenue. and Optimus. ZTE and 19, 2010 that the Group operating While revenue from Asia declined Telefonica deployed the first WiMAX revenue increased by 10.89% year-on- due to an incident relating to the network in Spain. The company has year to USD4.524 billion. Revenue safety inspection of communications also deployed seven LTE commercial contribution from the European and equipment in , the Group still networks and nearly 50 trial networks US markets amounted to 18% of total reported year-on-year growth in globally. Building on its success revenue for the first time. The year-on- international revenue. The Group in the 3G market, ZTE’s year revenue contribution from these worked closely with global carriers delivery capability received two markets increased by 45%. such as France Telecom, Telkom SA, recognition from leading carriers in The net profit grew by 12.02% to Telefonica of Spain and America Movil. Europe and the US. USD129.143 million in the six months By product, the Group registered In wireline products, the Group ended June 30, 2010 based on Hong year-on-year revenue growth of maintained its advantageous position Kong financial reporting standards. 1.08% for carrier networks, 39.71% in network and transmission Basic earnings per share amounted to for terminal products and 17.99% for network products. With regards to USD0.047. systems, access networks, the wireline access ZTE’s international revenue rose services and other products. products, represented by xPON, 19.58% year-on-year to USD2.246 In wireless products, the Group continued to lead the market. The billion, accounting for 49.65% of its optimized its position in the high- large-scale, network-wide commercial total operating revenue. end markets of Europe and the application of the FTTx solutions was In the first half of 2010, ZTE by consistently meeting achieved in major cities. supported 3G network construction customer needs in terms of cost In relation to transmission products, projects of some carriers and assisted reduction, low carbon emission and ZTE’s PTN, wave division and data with the replacement, coverage environmental issues. The Group communications products made extension and improvements of also enhanced its standing due to its headway in the industry and have relevant networks. This helped to experience dealing with multi-national been well received by leading global consolidate the company’s market share carriers and advanced SDR product carriers. In the first quarter of 2010, in China’s 3G network construction solutions. ZTE’s revenue from optic network amid a slowdown of investment in 3G Meanwhile, the company remains products ranked third in the world. Its networks. committed to key customers in the high-end cluster router T8000 was also The Group leveraged its customization Asia-Pacific region, Africa and launched globally. capability and cost advantage to Latin America, which all provide an During the first half of 2010, the participate in carrier tenders for products increasing share of revenue in wireless Group achieved rapid growth in the such as transmission networks, wireline products. sale of its terminal products, reporting access and terminals. Encouraging tender ZTE’s GSM/UMTS/LTE products 39.71% year-on-year growth in results were achieved, ensuring stable were deployed by the leading local revenue. www..com.cn

A Monthly Publication

Vol. 12 No. 9 Issue 128 September/2010

P3 Interview Winning Out in a New Round of Market Competition An interview with Huang Liqing, President of ZTE’s Wireline Product R&D Institute

Focus

Wireless E-Frame: See and Share Building a VAS Dream Factory P7 Wireless E-Frame not only enhances P12 A self-operated service platform that photo communication for families, supports fast service development and but also helps operators retain users, deployment gives wings to new service provide numerous information ideas and helps operators increase services, raise ARPU, and generate profit sustainable income streams

Opportunities in 3D IPTV MRBT: Better Ringtone Experience, P14 P10 Stronger Visual Impact 3D technology is still new to the ZTE’s MRBT solution allows IPTV field, and this is precisely the subscribers to personalize the look kind of opportunity that will allow and feel of their communications ZTE to demonstrate its leadership with sound, pictures, animations, flash, and video clips Third Eye Editorial Board Editor-in-Chief: Gu Yongcheng The Prospects for CDMA and the Rise o f ZTE 17 Deputy Editor-in-Chief: Huang Xinming By Q1 2010, ZTE had shipped an accumulated total Editorial Director: Zhao Lili of over 250,000 base stations, allowing the Chinese Executive Editor: Yue Lihua company to claim the No.1 spot in the CDMA market Editor: Paul Sleswick with a global share of 30.3% Circulation Manager: Wang Pingping China’s ZTE Makes U.S. Expansion with “Salute” 21 Phone for Verizon Wireless Subscription / Customer Services The U.S. has become the focus of ZTE’s handset efforts Subscription to ZTE TECHNOLOGIES is free of charge Solution Tel: +86-551-5533356 Fax: +86-551-5850139 Driving Rapid Growth of Tri-Network Convergence Email: [email protected] with xPON+EoC Solution 23 Website: www.zte.com.cn To provide converged multimedia voice, data, and image services, network operators are attempting to undergo technical transformation as they compete and cooperate Editorial Office with each other Address: NO. 55, Hi-tech Road South, , P.R.China P17 Postcode: 518057 Tel: +86-755-26775211 P25 Fax: +86-755-26775217 Email: [email protected]

ZTE Profile ZTE is a leading global provider of equipment and network solutions. It has the widest and most complete Case Study product range in the world—covering virtually Turk Telekom on the Road to Fixed Network 25 every sector of the wireline, wireless, service Transformation and terminals markets. The company delivers innovative, custom-made products and As Turk Telekom’s networks have developed, the disadvantages of traditional PSTN—such as aging, services to over 500 operators in more than large size, high power consumption, and lack of new 140 countries, helping them achieve continued value-added services—have become apparent revenue growth and shape the future of the world’s communications.

News Brief 27

 ZTE TECHNOLOGIES September 2010 Interview

Winning Out in a New Round of Market Competition

An Interview with Huang Liqing, President of ZTE’s Wireline Product R&D Institute

By Fang Li

ri-network convergence involving telecom, radio and TV, and TInternet networks has attracted industry attention in China, and the need for Fiber-to-the-home (FTTH) has grown considerably. Faced with a new round of market competition, telecom and cable TV operators are actively seeking to enhance access bandwidth. Optical access technology is entering a rapid- growth period, and bearer networks are undergoing great change to accommodate the upsurge in data traffic. Huang Liqing, President of ZTE’s Wireline Product R&D Institute was recently interviewed by ZTE journalist Fang Li. Huang expressed confidence that with 25 years experience in the wireline sector, ZTE can outperform the competition.

Journalist: What is the development trend of future wireline networks? How will ZTE innovate with its technologies to meet future trends? Huang: Future wireline networks are clearly moving towards broadband IP access, flat architecture, and intelligent, optimized operation and management. Huang Liqing is the President of ZTE’s Wireline Product R&D Institute. Network devices will also evolve so that Since joining ZTE in 1994, he has worked as ZXSM Project Manager, they can operate on an integrated platform. General Manager of Transmission Products, Deputy General Manager of Comprehensive Products Division, and President of Comprehensive Service expansion has driven the rapid Products R&D Institute. growth of network processing capacity and bearer bandwidth. Operators in China,

September 2010 ZTE TECHNOLOGIES  Interview

Europe, and the United States all plan in the DSL access market, we have possible to converge our existing data, to offer 50-100Mbps bandwidth to also succeeded in PON access. In transmission, and access equipment. home users and Terabit bandwidth to large-scale EPON deployments across This will bring many benefits to Metropolitan Area Networks (MANs) China, ZTE has led the market with operators. It could speed up the time- within the next five to ten years. its strong technical strength and high- to-market for new services, ZTE series Broadband networks require much quality products. We have also been products could be maintained with higher processing capacity at the core researching and pushing forward the same spare boards and parts, and and interfaces. NG-PON technology. In September new equipment combinations could We have prepared ourselves to 2008, we launched world’s first 10G be quickly assembled using additional provide 100G WDM equipment, EPON prototype; and in May 2009, interfaces. A unified platform would and have now started pre-research the world’s first symmetric 10G also significantly improve ZTE’s R&D into equipment supporting 100G EPON prototype. ZTE worked with efficiency and shorten the product (or greater) interfaces. Our 100G operators to conduct a 10G EPON development cycle. In designing a WDM equipment has differentiated test in July 2009, and launched the universal platform, we will draw upon advantages in terms of integration, world’s first 10G EPON commercial 25 years of technology accumulation power consumption, and transmission trial in September. Research has also in the wireline sector. distance. These can be attributed to been conducted into 10G GPON and Cooperation with operators and our continuous investment in product we are keeping close track of the latest universities is also vital, and we have R&D. We have invested considerable developments in this field. We are the proposed differentiated solutions. resources into 100G chips and industry leader in the NG-PON field. For clock and time synchronization software, and have cooperated with Flat network architecture will for packet-switched transmission, universities and high-end electronic inevitably lead to equipment we took the lead by using IEEE manufacturers. We keep abreast of the convergence, and planning is underway 1588 V2 protocol and Ethernet in most advanced developments in 100G for a universal architecture which can PTN products to substitute GPS time data and transmission equipment. accommodate different equipment. By synchronization. In substitution tests Capitalizing on our leading position designing a unified platform, it may be conducted by , this

 ZTE TECHNOLOGIES September 2010 solution achieved outstanding results, MSTP to PTN is actually an evolution benefited from its performance in and other manufacturers have taken from IP interface to IP core—from PTN, ZTE is ranked third in the global note. We are now undertaking further circuit-switched core to packet- optical networking industry according research, and continue to lead the switched core—which creates higher to Ovum’s latest report “Market Share: industry in this area. data transfer efficiency. 1Q10 Optical Networks, Global and Over the past two years, PTN Regional”. J: The widespread commercialization technologies and standards have of 3G networks has brought about evolved and matured. ZTE has J: Tri-network convergence will push an upsurge in data traffic. What cooperated closely with domestic and operators to speed up broadband requirements does this place on future overseas operators in PTN equipment connection. What modes have they transport network? R&D. China Mobile has focused used for their FTTx rollout, and how Huang: In the initial stages of 2G on PTN since April 2007. It began will they evolve in the future? and 3G development, Multi-Service laboratory tests in September 2007, Huang: Chinese operators currently Transport Platform (MSTP) provided and launched the first PTN equipment adopt three modes for broadband good support. But as 3G are more tender in November 2009. Now, the access: FTTH, FTTB, and FTTC. Of widely deployed, problems such as PTN network deployed by China these, FTTB is the mainstream option. low data transfer efficiency, rigid Mobile is the largest in the world. EPON has been deployed on a large transmission pipe, low bandwidth We have worked with China Mobile scale throughout China, reaching a utilization, and inflexible channel on PTN deployment, and this has capacity of 60 million lines, while configuration occur. Operators involved identifying demands and GPON has been deployed on a small therefore seek a new transport network defining standards. ZTE is a member scale. Neither EPON nor GPON can that can carry data services in a more of more than 70 international standards meet future broadband requirements. flexible and cost-effective way. Packet organizations and forums, and has Therefore, both telecom and cable Transport Network (PTN) has been submitted more than 100 proposals in TV operators have devised long- proposed as the transport technology the area of PTN. This has profoundly term bandwidth plans, aimed at of the future. The transition from influenced the industry. Having delivering 50-100Mbps bandwidth

September 2010 ZTE TECHNOLOGIES  Interview

to each home user. If this eventuates, and editor for physical layers of ITU-T for the past 20 years, and we own Gigabit bandwidth will be required NG-PON, contributing greatly to core technologies in this area. ZTE for buildings, and Terabit bandwidth standardization work on 10G EPON. is proud to be the leading provider of for MAN areas. To satisfy bandwidth In April 2010, we joined several cost-effective power solutions. We requirements, upgrading xPON to 10G 10G EPON chip manufacturers supply system power, core power, and PON, EPON to 10G EPON, and GPON including PMC-Sierra, Broadcom, and electromechanical management with to 10G GPON will be necessary. Opulan to conduct interoperability power efficiency exceeding 96% and 10G EPON standards were released tests. The results show that our 10G modular power efficiency exceeding in September 2009, almost one year EPON equipment has matured. So 95%. earlier than 10G GPON standards. far, we have conducted 10G EPON We provide core chip design that Symmetric bandwidth in the uplink commercial trials in more than 20 integrates different functions into and downlink has been defined for 10G provinces across China. one chip. This minimizes equipment EPON, and asymmetric bandwidth ZTE has also continued its size and reduces power consumption. has been defined for 10G GPON. investment into GPON and 10G In chip manufacturing, we adopt The evolution from EPON to 10G GPON. We have submitted around 50 sophisticated techniques to reduce EPON represents enhanced network 10G GPON proposals to FSAN and radiation. Through intelligent capability. EPON and 10G EPON ITU-T, and have participated in the management, chips or ports not in use terminals can share the same PON drafting of ITU-T G987.2 standards are set to “idle”, which reduces energy port, and terminals can be upgraded for 10G GPON. In December 2009, consumption by around 50%. Small- according to bandwidth needs. we helped Telecom Italia in its sized equipment does not need air However, evolution from GPON to commercial deployment of FTTB cooling. And for equipment that does 10G GPON is a different process using GPON+VDSL2. require air cooling, smart fan control because GPON and 10G GPON technology is used. Lowering fan terminals cannot share the same PON J: Finally, would you talk about speed can save energy by 20%. Our port. The 10G EPON industry chain the efforts ZTE have made in equipment recovery rate exceeds 80% has matured over the past two years environmental protection and energy and board recovery rate is up to 50%. so that 10G EPON has advantages conservation? ZTE has the widest and most over 10G GPON in terms of network H u a n g : Today’s operators are complete product range in the deployment and standard maturity. increasingly attuned to energy industry. This allows us to quickly conservation and emissions and thoroughly implement our J: What progress has ZTE made in reduction. ZTE shares this concern. energy saving and emission reduction 10G PON? Environmental protection is at the strategies. We have made great Huang: ZTE launched the world’s forefront of our thinking in product inroads into energy conservation and first symmetric 10G EPON prototype design, manufacturing, application, environmental protection. In 2008, in May 2009, and has since taken a and recovery. our broadband access product ZXDSL leading position in the 10G EPON Our energy saving and emission 9806 received “Best Green Innovation” field. As a leading PON equipment reduction strategies are focused on award at the SOFNET forum in vendor, ZTE has long been engaged network, technology, equipment, and London. In 2009, our ZXDSL 9806H in studying 10G xPON standards. operation. We attach great importance passed the China Environmental We have participated in national and to developing flat, converged, and Labeling (Type II) certification. This international conferences and put smoothly evolved networks that limit certification involved an energy forward many important proposals. In energy consumption of DSL, LAN, efficiency evaluation, harmful 2009, we hosted the IEEE 10G EPON PON, POTS and WiFi technologies, substance inspection, and product conference. Dr. Marek Hajduczenia of and that adopt energy-saving modes recovery and disassembly analysis. It ZTE has been an editor for IEEE 10G in chip, board, and equipment. was the first time a telecom product EPON, chief editor for IEEE Service We have been developing power had been granted such certification. Interoperability in EPON (SIEPON), technologies for telecom products

 ZTE TECHNOLOGIES September 2010 Focus

Wireless E-Frame: See and Share

By Hu Wenwen

n today’s interconnected world, grandparents living in their hometown product that displays pictures and people choose to study, work, and perhaps without computer information through an LCD screen. It Ior travel away from home. It is knowledge look forward to hearing uses an embedded wireless electronic therefore not uncommon for parents from their grandchildren; and family communication module to receive and children to live in different members keep each other up to date by pictures or MMS messages from a locations, and the need for distant sharing holiday pictures. or a web portal at any communication among family members The Wireless E-Frame has been time. These can be browsed through has grown. Parents want to know developed in response to these needs. and played automatically. You might how their children are getting along As with traditional digital frames, the be sightseeing in Paris, taking in the with their work or studies abroad; Wireless E-Frame is a small electronic impressive Eiffel Tower. You snap a

September 2010 ZTE TECHNOLOGIES  Focus

ZTE’s Wireless E-Frame enriches message services, increases MMS traffic flow, and generates more revenue for operators.

picture on your mobile phone and send multimedia messages. It has a USB a large 7-12 inch LCD screen, and it to your grandmother thousands of port for accessing data on a hard disk, supports a variety of picture display miles away with a thoughtful message and a SIM card slot for receiving styles including auto play, replay, full attached (see Figure 1). pictures through wireless networks. screen, split screen, and additional It supports Wi-Fi Internet access, has picture frames. Audio and video play ZTE’s Wireless E-Frame Solution ZTE’s Wireless E-Frame is an end- to-end solution that allows anyone to send pictures from a camera phone or The picture digital camera to the Wireless E-Frame. displayed on Send the picture a Wireless It enriches message services, increases E-Frame MMS traffic flow, and generates more revenue for operators.

Take a picture with a mobile phone Friendly use experience The Wireless E-Frame supports two Figure 1. An application case of Wireless E-Frame. use modes: sending MMS via mobile phone (see Figure 2) or via web portal “Wow! Our dear Tom is (see Figure 3). Pictures can be taken growing up with a mobile phone and then sent to quickly!” a Wireless E-Frame via MMS. The pictures can be shared in real time with Send a MMS Message family and friends. Although phone cameras are convenient, the picture Camera Phone resolution is often limited. To enhance user experience, the Wireless E-Frame also supports sending high-resolution Figure 2. Sending MMS messages via mobile phone. pictures via a web portal. Pictures can be taken with a digital camera and uploaded to a dedicated web portal. After some touchups, they can then be sent to the Wireless E-Frame terminal. Upload Send

Versatile and fashionable E-Frames As well as having traditional digital Digital Camera Web Portal frame functions, ZTE’s Wireless E-Frame can receive and display Figure 3. Sending MMS messages via web portal.

 ZTE TECHNOLOGIES September 2010 (repeat mode, file copy, delete) are also supported and background music can be set. The Wireless E-Frame is GPRS enabled for receiving and displaying multimedia messages, and has calendar, clock, weather forecast, and FM broadcasting functions. Wireless E-Frames can be Figure 4. Custom-made Wireless E-Frames. customized to meet user needs and preferences. They are not only real- time picture communication tools but also fashionable pieces of home décor News Push (see Figure 4).

Easy-to-use web portal ZTE’s Wireless E-Frame provides a web portal for end users. Photos taken with a digital camera can be uploaded to the portal—where text Movie Poster E-Magazine Concert Poster Entertainment News can be inserted, editing can be done, or audio and video content can be Living Helper added to create personalized content. The final message can then be sent to the Wireless E-Frame. The web portal makes it possible for users to share high-resolution photos through wireless Map Navigator Weather Forecast Information Query Radio Station networks, and create customized E-Greeting Card E-Advertisement content.

Featured functions To enhance user experience, ZTE’s Wireless E-Frame also delivers featured services. It supports partial and resumable downloading so that Figure 5. A variety of services being carried. large-sized photos transmitted from the web portal are delivered completely in phones, and will be attractive to country’s total population. Its college a low-rate GPRS network. Moreover, families. It may also be adopted by students exceeded 20 million in 2009 it has a “click and send” plug-in on the newspapers, greeting card companies, (among which 6.1 million were graduates), web page. After installing the plug-in audio magazines, movie distributors, and outbound travelers totaled 47 million. package, users simply right-click their or advertisers as a new way of The potential user base for Wireless favorite pictures, audios, or videos delivering content (see Figure 5). The E-Frame is very large and diverse. and send them to the E-Frame when infotainment potential of the Wireless Wireless E-Frame not only enhances browsing a web page. E-Frame is certainly promising. photo communication for families, but In modern society, people are on also helps operators retain users, provide Potential in the Infotainment Era the move. China’s floating population numerous information services, raise Wireless E-Frame provides reached a record 211 million people in ARPU, and generate sustainable income better visual experience than mobile 2009, accounting for over 11.27% of the streams.

September 2010 ZTE TECHNOLOGIES  Focus

MRBT: Better Ringtone Experience, Stronger Visual Impact

By Shao Chunyan

pecial Color Ring Back especially in China where operators segment and the emergence of 3G Tones (CRBTs) for families have bundled it into service packages networks, providers are seeking to Sand friends have become a or enterprise advertisements—and develop new services and features fashionable way of personalizing it has become their main business. that capitalize on the multimedia mobile phones and conveying feeling. However, this has not been the case capabilities of these maturing CRBT subscribers can choose a unique in Europe and America because of technologies. ringback sound for each caller. A love differences in tariffs, user cultivation ballad may be suitable for a partner, methods, and more importantly, in MRBT: An Inevitable Trend a funny sound clip for a friend, or a culture. The French, for example, see A mobile user survey conducted by traditional tune may be chosen to mark that mobile phones are used primarily MTrend in 2009 found that 70.3% of a festival day. CRBT is designed to for answering calls and thus CRBT is users were interested in seeing video liven up the line as a caller waits for of little value. clips or pictures while waiting for call connection. CRBT services have already connection, and 15.2% were greatly matured and are widely recognized interested (see Figure 2). The results Bottlenecks in CRBT Development by users. Yet demands are changing suggest that service providers should be CRBT was first introduced by and more innovative services are looking to provide a richer multimedia South Korea’s SK Telecom in continually expected. With the experience. March 2002, and has since gained explosion of the wireless market Responding to this interest, widespread popularity. It satisfies a need for style and individuality in 45 45 mobile communications. As a value- 40 Penetration added service without any terminal 35 constraints, CRBT is straightforward 30 to use and can be spread rapidly. 25 23 In recent years, the CRBT business 20 15 has grown unevenly across global 15 12 10 markets. According to Ovum, 5 5 penetration of CRBT in 2009 was 0 45% in China and India, but only China and Asia-Pacific Middle East Europe and Latin 5% in Latin America, as illustrated India Region and Africa America America in Figure 1. CRBT has developed Source from Ovum 2009 strongly in the Asia-Pacific region— Figure 1. Global CRBT business in 2009.

10 ZTE TECHNOLOGIES September 2010 Multimedia Ring Back Tone (MRBT) China Mobile Internet User Data has been introduced, which expands Demand for MRBT CBRT with ringback videos and pictures. 60% 55.1% Bland ringback tones of the past have been replaced, and users can now 50% experience enriched telephone calls with 40% attention-grabbing multimedia clips. 30% MRBT Scenarios 21.9% 20% MRBT differs from CRBT, and can 15.2% be applied in the following scenarios: 10% 5.6% 2.2% Scenario 1: Visualized audio call When a call is made to a recipient Not at all Not very Fair Interested in Very interested in interested in interested in with video support, the MRBT system Source: MTrend 2009 www.MUser.net.cn can send a preset video clip to the recipient. Regardless of whether the Figure 2. Mobile user survey by MTrend. caller makes a video call or not, the recipient can see the preset video clip. domain of 3G WCDMA networks and group members, to set the ringback This cultivates a familiarity with video the packet switched (PS) domain of play time, to monitor corporate communication and increases video NGN/IMS networks. Either the caller video clips, and to collate usage traffic. or the recipient can subscribe to the statistics. service. While the phone is dialing for a ■ Advertisers: This service targets Scenario 2: Video call avatar connection, unique multimedia content enterprises and manufacturers who During a video call, the recipient is played to the caller. make advertising video clips to be can play a preset video by pressing the MRBT supports three call scenarios, shown to public upon approval. DTMF key and replace the live video of and ZTE has applied for patents at If individual users subscribe the camera. This helps to protect privacy. home and abroad for its MRBT solution to such advertising, they may in scenario 1. It has also categorized receive benefits such as discount Scenario 3: Video call completion MRBT services according to user coupons. ZTE’s MRBT also If a video call is made but the segmentation: supports advertising for shop sales recipient does not support video ■ Individual users: This service campaigns. communication due to a terminal or targets individuals who set their network problem, the call can proceed preferred video clips through SMS, Conclusion uninterrupted even though the system IVR, and the Web. With the promotion of 3G is attempting to send through a preset ■ Family users: This service targets applications and the growing popularity video clip. This also helps cultivate family members, friends, relatives, of smart phones, mobile phones are familiarity with video communication or classmates who are set as a no longer merely tools for answering and increases video traffic. family group in order to enjoy the calls, sending messages, or updating same or similar video clips. One ring tones—they are a multimedia ZTE’s MRBT Solution group member is chosen to manage infotainment platform integrating ZTE’s MRBT solution allows video content and to manage other information, entertainment, mobile subscribers to personalize the look members. e-commerce, and mobile payment and feel of their communications with ■ Corporate users: This service targets functions. With further 3G rollout, sound, pictures, animations, flash, and corporate groups. Employees are MRBT is sure to offer a more colorful video clips. MRBT can be provided designated as group members, some ringtone experience and stronger visual in both the circuit switched (CS) of whom are chosen to manage impact.

September 2010 ZTE TECHNOLOGIES 11 Focus

Building a VAS Dream Factory

By Chen Lan

obile value-added services As service development increases of SPs were introduced to deploy a (VAS) have developed in line with terminal, network, and variety of services; but inevitably, Mrapidly in recent years, software evolution, an urgent need China Mobile became a mere “pipe” and with fast market penetration, arises for an open and converged provider. Profit-motivations at this have brought huge economic benefits service environment based on existing stage meant that many SPs engaged in to Chinese operators. A new mobile service development and provisioning behavior that was counterproductive to information service industry has come systems of Internet and telecom China Mobile. To remedy this problem, into being, comprising infrastructure networks. A new service environment China Mobile set up a series of telecom operators, service providers geared for the future will provide management platforms to regulate SP (SPs), content providers (CPs), and a next generation tools for simple and behavior in the second stage. Although variety of application providers (APs). easy service development so that APs, SPs were required to deploy their A primary concern of operators is to SPs, and CPs—as well as clients and VAS on a unified platform, fraudulent further strengthen and expand their subscribers—can co-operate in the behavior involving consumption of VAS businesses. rapid creation of new services. services by SPs themselves could not be completely avoided. To build a Unified Service Platform Open Deployment Environment healthy industrial chain, China Mobile With the rapid growth of ICT and Operators urgently need a “service started to weaken the role of SPs, and the Internet, demand for integrated, hatchery” that can constantly roll out in the third stage, gradually turned multimedia, and personalized mobile new services. Modules could simply them into CPs. The operator would VAS has grown significantly. As a be expanded on a Unified Open provide certain high revenue services result, enhanced service capability Environment (UOE) without the need with strong user loyalty on their own. has become the objective in research for a new platform. This facilitates A self-operated service platform was and application of new network interoperability between application therefore necessary for successful VAS technologies. The key to achieving platforms, and helps operators reduce operation. By integrating an operator’s this objective is service convergence TCO and hasten the deployment of internal resources with social resources, or a mobile VAS platform. Deploying services to end users. and adopting unified policy and user services rapidly to meet market China Mobile has a clear track interface, a self-operated service demands has therefore become a core record in VAS operation. Initially, platform can offers feature-rich and competitive strategy, and service China Mobile knew little about personalized value-added services. development a key part of network operating VAS nor the services that Responding to these needs, ZTE operation. would be profitable. A large number has launched a self-operated service

12 ZTE TECHNOLOGIES September 2010 platform that helps operators establish a unified, open, and orderly VAS system. Service Service Development Dispatch User Portal / CP/SP Portal / Operator Portal Self-Operated Service Platform Environment Management Common Management

Content CP/SP Service Functional modules Service 1 Service 2 Service 3 Functions Order A self-operated service platform Product Relation User Service 4 Service 5 Service 6 Database consists of UOE and Unified Terminal Billing Log/CDR VAS Dream Factory Management Platform (UMP). UOE Service 7 Service 8 Service 9 Statistics Authority System is responsible for openness and Service Execution Environment adapting different capabilities, and UOE UMP provides a stable application-managed environment. Its downstream network Call in IT capabilities Call in CT capabilities Synchronize order relation elements are engines for the various capabilities. UMP is responsible for IT Service System ISAG ISMP man-machine interaction, maintenance of management data, and service SMSC SMGW MMSC … … WAPGW BOSS IN authentication and rating. ■ Service access The service access system calls Figure 1. Self-operated service platform architecture. in various service capabilities to be registered. The platform divides Services are created in the profit. Through a unified and open these registered capabilities into two development environment and deployed environment, all network capabilities categories: capability requests initiated in the service execution environment. can be converged and opened. UMP can by the system to the outside, and The execution environment is a safe, be used to manage these capabilities capability requests the system receives reliable, stable, and high-performance and to support interaction with external from the outside. The former also container that provides engine, IT systems. A self-operated platform called atomic services (such as sending management, and basic functions. has the following advantages: SMS/MMS, and checking weather ■ Service test environment ■ Multiple service support; forecast), and the latter uplink service Service test environment includes ■ Fast service deployment; (such as SMS/MMS uplink requests). network and terminal simulation. ■ Controllable service testing; These capabilities can be registered, One network simulation environment ■ Fast service access. upgraded, or cancelled, which makes supports multiple simulated terminals, With a self-operated platform, the system scalable and flexible. and all Integrated Service Access network resources can be converged. ■ Service development environment Gateway (ISAG) services can be Service discovery, verification, UOE provides three tools for simulated on the terminals. execution, and billing can also be users and service developers: a ■ Service management converged, and this gives VAS its programmable development tool for Service management involves core competitive advantage. Content people with programming ability; a service lifecycle and status management provided by CPs is launched and graphic wizard development tool for as well as service simulation and deployed in UOE, authenticated and people with no programming ability monitoring. charged by UMP, and finally used by but good VAS business and computer subscribers. The operator becomes a literacy; and a web-based service Value chain bridge connecting CPs and subscribers, development tool for people who A self-operated service platform that and a stable revenue stream can have no technical background but are supports fast service development and be created. A self-operated service familiar with VAS business. deployment gives wings to new service platform helps an operator build a VAS ■ Service execution environment ideas and helps operators increase dream factory.

September 2010 ZTE TECHNOLOGIES 13 Focus

Opportunities in

By Tan Hao

ovies such as Avatar may technology. Audiences are immersed in TV manufacturers , Samsung, not be 3D biggest drawcard, a tidal wave of 3D audio and video. , and rushed to Mbut they are certainly At the 2010 International display their new 3D TV products, and attractive. Avatar vividly depicts the Consumer Electronic Show, leading Chinese manufacturers “Hallelujah” mountain and some epic and followed suit. Currently, battle scenes using the latest IMAX 3D 20% of larger LCD TV sets support 3D; and in the future, more and more families will acquire 3D HD TV sets. During the recent FIFA World Cup, professional 3D cameras were used to shoot more than 25 matches, which

14 ZTE TECHNOLOGIES September 2010 Opportunities in

were freely broadcast on satellites around the globe. On-field and off-field passions were displayed with vivid and today is up to the task of bringing unprecedented clarity. 3D audio and video into millions of demonstrate its leadership. Against this background, ZTE—a households. During the development of 3D, leader in IPTV—is closely monitoring In this context, major TV operators several film source formats and the development of the 3D TV market. have already released 3D HD realization methods have come to the A goal of ZTE’s IPTV business channels. British Sky Broadcasting, fore. At present, most film sources development has been to introduce 3D for example, employs the latest stereo are red-ray/blu-ray, which realizes into IPTV by upgrading original IPTV video cameras for shooting 3D images, 3D effects by using ordinary players platform devices. which are broadcasted to the world and display devices aided by a pair of 3D audio and video technology after being processed on the front- inexpensive viewing glasses. It is so dates back to the 1950s. It was mainly end. Many movie and TV producers easy to realize 3D effects on IPTV that applied in movie theaters rather than are also promoting 3D movies and TV the existing devices have no problems family homes due to limitations in programs vigorously. Even the gaming achieving it. However, color and TV technology. A family-oriented industry is weighing in on the trend. brightness are less vivid when 3D is 3D solution based on dual projectors The 3D TV industrial chain is maturing produced this way. emerged when portable overhead gradually, and related technology is Another film source is represented projectors became available; but even in steady development. However, 3D by the left and right format. Left and still, this failed to impact the household technology is still new to the IPTV right eye images recorded by a video market because of cost and immature field, and this is precisely the kind of camera are combined into one image technology. opportunity that will allow ZTE to (see Figure 1), and one of the sound With the continuous development of LCD, many foreign and domestic manufacturers have released new TV sets that support 3D broadcasting. 3D blu-ray stereoscopic players and 3D auxiliary equipment such as active shutter time-resolved glasses have also Display been released. It is no exaggeration to say that terminal equipment available Figure 1. Display principle of the left and right format.

September 2010 ZTE TECHNOLOGIES 15 Focus

a development from AVC video coding based on ITU H.264 standard presently supported by all blu-ray disc players. Compared with 2D content, data increases by half due to MPEG4-MVC technology adopted by Blu-ray 3D™ standards. Data associated with left and right eye images is compressed, and backward compatibility with 1080p high resolution of existing 2D blu-ray players is enabled. ZTE plans to support MVC coding in the next stage. By upgrading and renewing its headend encoder, MVC stream output will be realized and HD IPTV set-top boxes will be released to support MVC stream decoding. tracks from the two images is adopted. over 120Hz and active shutter time- After decoding, the stream will be The resolution using this film source is resolved glasses, the viewer’s left and transmitted through HDMI to 3D double the ordinary one. For example, right eyes can see the left and right TV sets for display. In a competitive combining two images with 640×480 images respectively, which creates a IPTV market, satisfying ever-changing resolutions can achieve a resolution 3D display effect. customer demands is key for market of 1280×480. This is a mainstream ZTE accomplished the first stage development. As far as operators are technique in radio and TV. Football of its project by adding an image concerned, creating new functions and match broadcasts as mentioned above, synthesizer to the original IPTV features is important for competitive use this method. Two images with platform, and by providing left and differentiation and of great help in the 960×1080 resolutions can be right film formatting resources to retaining customer loyalty. combined into one full HD image with realize 3D . 3D IPTV At present, left and right format a resolution of 1920×1080. audio and video was introduced to technology is comparatively mature. In order to realize this, an image family 3D TV sets through ZTE’s 3D solutions based on this technology synthesizer and algorithm is necessary ZXV10 HD set-top box. were first released by ZTE, who to synthesize the dual streams At the end of last year, the Blu- have since led in 3D IPTV audio and collected by the 3D video camera into ray Disc Association (BDA) formally video applications. ZTE continues to a single long stream. The synthesized announced that they had formulated dominate the high-end IPTV market; stream is then sent to an encoder. Blu-ray 3D™ standards, and released meanwhile, competitors are hastening Existing encoders and set-top boxes the specifications. These 3D standards their research and development of do not need to be upgraded, but the were completed in collaboration MVC technology due to vigorous highest possible resolution is 1920× with Hollywood movie studios, and promotion by BDA. Yet it will take 1080 due to the limitations of existing consumer electronics and computer some time to release these commercial devices and software. The effective producers. With the blu-ray disc― products. Looking to the future, MVC image resolution is therefore 960× the most powerful HD family will be the developmental trend that 1080, which is insufficient for full entertainment platform—the 3D ZTE must closely follow. When HD. After decoding by the set-top experience will become commonlplace MVC is applied on a large scale, ZTE box, images are sent to the 3D TV in family homes. can release corresponding products, set, which displays the images one by Blu-ray 3D™ standards adopt 3D dominate the market, and stay ahead in one after separating out the left and video coding based on Multiview the IPTV field. right images. With a high refresh rate Video Coding (MVC). This represents

16 ZTE TECHNOLOGIES September 2010 Third Eye

The Prospects for CDMA and the Rise of ZTE

August 2010, by Godfrey Chua, from market research firm IDC

his IDC update provides a summary examination of Tdevelopments and prospects for the CDMA market. It takes into particular consideration recent IDC conversations with CDMA service providers carried out between late June and July 2010. This effort also includes attending a CDMA Development Group (CDG) presentation as well as participating in a CDMA operator conference.

Situation Overview CDMA technology has faced many challenges. Most recently, reduced spending in the key CDMA market of the United States has noticeably shrunk the overall infrastructure opportunity. Top CDMA operators Verizon Wireless and Sprint certainly maintain sizable budgets for expanding and maintaining their existing networks. However, a large portion of their capital expenditures have shifted to next- generation technologies such as LTE and WiMAX. Coupled with technology shifts by a number of CDMA operators in regions such as Asia/Pacific and

September 2010 ZTE TECHNOLOGIES 17 Third Eye

Latin America, the overall global CDMA operators and proponents technologies that are delivering market for CDMA infrastructure has revealed the following: important connectivity services to indeed been on a decline. consumers across the globe. To further examine the prospects ■ CDMA is alive and well for CDMA infrastructure, IDC held a CDMA remains a sizable market ■ EV-DO Rev.B sees a second lease series of conversations with a variety with a vibrant community of operators on life, courtesy of of CDMA operators and proponents successfully delivering innovative In relatively modest efforts, Rev.B from around the world. The variety mobile voice and data services in networks have been launched by PT Smart of and global viewpoint of these all parts of the world. According Telecom and Pakistan Telecommunications. conversations were critical to ensuring to the CDG, the roster of operators This is notable because since the that they provide a thorough picture now numbers some 310 commercial time Verizon Wireless chose to move of the prospects for CDMA. One of entities, of which there are 114 EV-DO to LTE, much of the momentum the more notable themes to arise was Rev.0 and 94 EV-DO Rev.A networks. behind Rev.B had slowed and in that, while the market as a whole has There were in sum 522 million many respects the technology had seen an overall decline in recent years, CDMA subscribers at the end of 2009 been written off. However, through the pace and actual experience have (specifically, 518 million CDMA2000 the persistence of the CDG and key varied. Pockets of opportunities persist and 142 million CDMA2000 1xEV-DO technology vendors and the support for CDMA. Markets such as China, subscribers). In fact, there are now two of several operators, Rev.B is seeing India, and a number of other countries commercial EV-DO Rev.B networks some renewed momentum. Particularly (particularly in emerging markets) offer ( and Pakistan). CDMA has noteworthy is the support offered dynamic—and in some cases even not evolved to be the dominant wireless by China Telecom. China Telecom modestly expanding—opportunities. infrastructure technology out there— is trialing Rev.B in three cities and Overall, some of the key themes that but it certainly continues to have shows a clear openness to its potential arose from the conversations with its place in the portfolio of wireless commercial deployment. For the most

18 ZTE TECHNOLOGIES September 2010 ■ The CDMA market will continue to decline, but the opportunity will persist for the long term There is no denying that, as a whole, the CDMA infrastructure market will continue to decline. This trend will persist as the world coalesces toward the 3GPP road map of LTE. The path toward this transformation will however be long and complex. Networks cannot be transformed overnight. It has taken until 2010 for overall 3GPP 3G spending to surpass 2G spending—a point of transformation that is as much as five years behind what many had predicted when 3G was first introduced at the beginning of this decade. The lesson there was that network transformation is time consuming and requires careful planning and anticipation of changing customer needs. Thus, for CDMA, it will not be disappearing overnight. Numerous part, the decision to move forward demands—and they will continue operators IDC conversed with over with Rev.B will be predicated on how to do so for a long while. However, the past several weeks expressed subscribers’ data consumption behavior these networks are also maturing, and continued strong support for it. There is evolves on its network over the next operators are transforming spending certainly the expectation that they will 12–24 months. With aspirations to toward next-generation technologies. continue to spend on the technology become the largest CDMA operator in It is therefore of no surprise that the as they maintain and expand existing the world by the end of 2010 (which in majority of CDMA-related expansion networks—with the only caveat being IDC’s view is likely to happen), China and subscriber growth resides in a that capital expenditure budgets will be Telecom offers the kind of economies region such as Asia/Pacific. As is bifurcated by an eventual shift toward of scale that would bring an important the case in China, India, and other next generation technologies such as critical mass to the Rev.B ecosystem. emerging countries, relatively low LTE. The proportion LTE spending mobile penetration levels leave room takes will naturally increase, especially ■ The traditional (developed for further growth. during the second half of this decade as market) CDMA markets are momentum for the technology builds in waning, but opportunities remain Future Outlook emerging markets. in key emerging markets IDC anticipates CDMA will remain To be sure, the U.S. market, which a sizable and important opportunity. ■ Opportunities will be created in has long served as the foundation of It will certainly continue to play an the CDMA to LTE transformation, the CDMA infrastructure opportunity, important role in delivering mobile while Rev.B provides a modest but is still a significant market for CDMA voice and data services to consumers notable upside infrastructure. Operators are still and enterprises across the globe. In The potential with CDMA operators spending on their existing CDMA IDC’s view, the following three key is defined by the sum of the CDMA networks—expanding and maintaining themes will define the CDMA market infrastructure opportunity and the them to meet ever-changing customer ahead: requirements arising out of the network

September 2010 ZTE TECHNOLOGIES 19 Third Eye

transformations that will eventually be derived from the segment and is As CDMA service providers have noted taking place. Ultimately, the customer particularly strong in North America. to IDC, ZTE is one of the most, if not target is the over 300 commercial Other traditional players such as the most, cost-competitive suppliers operators involved in CDMA and and Motorola have faced many (this is especially true in emerging selling them the necessary equipment challenges and now have been acquired markets and also self-evident from the and services to enhance existing or are in the midst of being acquired sheer volume of ZTE’s base station operations—and then building upon by their larger 3GPP counterparts shipments). IDC’s observations of that relationship to better position ( acquired Nortel’s CDMA wireless infrastructure pricing patterns oneself for the next-generation build assets, while Siemens is in the around the world reveal especially cycle. The CDMA opportunity naturally midst of acquiring Motorola's networks aggressive discounting of base station extends to LTE transformation. Rev.B division). Amid the intensifying equipment in the past 18 months will also present good opportunities, as competitive pressures, it is Shenzhen (in addition to increasingly creative evidenced by the nearly 15 operators based telecom equipment vendor ZTE financing strategies). Greenfield builds, planning to deploy it in the near term. that is thriving. Over the past five years, especially those offering high volumes, Many more operators are likely to ZTE CDMA base station shipments see unprecedentedly low pricing. It is look into the technology, especially have increased from a modest 9,100 in clear that there is a strategic imperative if a carrier such as China Telecom 2005 to (according to ZTE) a record within ZTE to build market share in commits to it. While Rev.B will not level in excess of 115,000 in 2009. the near term. Customers also note create nearly the kind of opportunity IDC’s review of 2009 activity confirms the strong commitment to their local the LTE transformation process will, it that this ranks ZTE as the market markets, a key attribute they look for will be sizable nonetheless. Thus, for leader—in terms of both unit shipments when procuring equipment. ZTE’s equipment vendors heavily invested in and installed base of BTS (see Table 1). strength in CDMA also does not CDMA, it will be essential to hold on The company has been pursuing stop at pricing and commitment. The to customers via a strong CDMA value CDMA opportunities throughout the company is increasingly known for proposition to be effectively positioned world, and a particularly aggressive its innovations and efforts to push the as the key partner for the network go-to-market approach in emerging technology forward. ZTE was the first transformations ahead. markets has yielded ZTE strong in the world to deploy a commercial dividends. ZTE has certainly benefited EV-DO Rev.B network, providing ■ Amid market transformations, from the robust CDMA market in equipment to Smart Telecom, which vendor positions shift and ZTE China. However, it is the attention commercially launched Rev.B–based rises placed in other parts of Asia and Africa service in Bali, Indonesia, on January The CDMA vendor community is that has allowed ZTE to further expand 10, 2010. ZTE also has a total of four transforming as a result of the inherent its volume of activity. ZTE has, for trial and commercial EV-DO Rev.B stresses faced by the segment. Alcatel- example, taken CDMA leadership engagements, making the company the Lucent, the longtime leader, maintains positions in India and Indonesia, two of most active and early leader. Further overall leadership in terms of revenue the more robust country markets today. innovations and another first include trial deployment of dual-mode CDMA Table 1. CDMA: BTS shipments and BTS installed base by vendor, 2009 and 1Q10 and LTE transformational base stations. Estimated BTS Estimated BTS Installed Share of BTS Installed While the Rev.B and transformational Shipments (2009)(000) Base (1Q10)(000) Base (1Q10)(%) deployment is modest, it nonetheless Alcatel-Lucent 105 235 28.50 allows for early experience in what will 90 180 21.80 be an important competency for any Motorcta(NSN) 15 60 7.30 CDMA supplier—deploying unified Nortel(Ericsson) 16 85 10.30 network elements capable of managing ZTE 115 250 30.30 different generations of technologies.

Source: IDC, 2010

20 ZTE TECHNOLOGIES September 2010 China’s ZTE Makes U.S. Expansion with “Salute” Phone for Verizon Wireless

August 20, 2010 by Olga Kharif Source: Bloomberg

TE, China’s second-biggest maker of telephone equipment, Zis expanding in the U.S. with an agreement to sell a handset through Verizon Wireless. Executives unveiled the phone, the Salute, yesterday in ZTE’s first handset agreement with a top-three U.S. wireless carrier. Verizon Wireless is the largest mobile-services provider in the U.S., with more than 92 million subscribers. “It’s a very good start,” Jeff Ji, executive vice president for ZTE’s U.S. unit, said in an interview. “We are actively working with all tier-one operators in the U.S.” ZTE is in talks with T-Mobile USA Inc. and Sprint Nextel Corp. as the U.S. becomes the focus of ZTE’s handset efforts, Ji said. The Shenzhen, southern China-based company, which got more than 80% of its revenue last year from Asia and Africa, said it spent more than $1.5 billion in 2009 investing in hardware and software in the U.S. Operating revenue for the six months ended June 30 increased 11%

September 2010 ZTE TECHNOLOGIES 21 Third Eye

ZTE plans to introduce a in the U.S. in 2011, the same year it will offer broadband devices such as data cards for 4G wireless networks based on technology called long-term evolution.

to 30.7 billion yuan ($4.52 billion), the U.S. last year. and voice messaging. It will sell for $20 company said yesterday in a statement. The company has since 2009 hired after a $50 mail-in rebate and with a Sales from Europe and the U.S. executives who worked at two-year contract. accounted for 18% of total revenue Corp., T-Mobile and Nokia Oyj, and grew 45% from a year earlier, the world’s largest maker of mobile Catching HTC according to unaudited financial phones. ZTE, which employs 70,000 ZTE plans to introduce a smartphone statements. people globally, said it plans to create in the U.S. in 2011, the same year it more than 2,000 U.S. jobs in the next will offer broadband devices such as Handset Business several years. data cards for 4G wireless networks ZTE’s handset business increased based on technology called long-term the fastest, rising 40%, while its Sales Effort evolution, Ji said. The company has infrastructure business gained 1% “We have continued to recruit in a portfolio of based on and its telecom software services and sales and marketing and logistics,” Ji Inc.’s Android software and software business advanced 18%, the said. Microsoft’s Windows Mobile system company said. jumped With seven U.S. offices and a that can feature touch screens or 12% to 877.5 million yuan, or 0.31 research-and-development center in BlackBerry-like looks. yuan a share, from 783.4 million yuan, Austin, Texas, the company began Total research-and-development or 0.29 yuan, a year earlier, based trying to sell phones to U.S. carriers in expenditures jumped 45% in 2009 on financial reporting the past three years, Ji said. MetroPCS while sales grew 36%, according to standards. Communications Inc., the U.S. pay- data compiled by Bloomberg. Tina ZTE mainly sells equipment for as-you-go mobile-phone company, has Teng, a senior analyst at iSuppli, said telecommunications networks and gear had four ZTE handsets since 2008. I ZTE has a long way to go before it can to more than 500 carriers in at least Wireless, a service provider affiliated replicate the rise of Taiwan handset 160 countries. In the first quarter, it with T-Mobile, started selling one a maker HTC Corp., which raised its ranked as the seventh-largest maker year ago, and Verizon Wireless last profile in North America with phones of handsets worldwide by shipments, year offered ZTE’s mobile broadband based on Google’s Android. according to iSuppli Corp., an El USB modem. Verizon Wireless is co-owned by New Segundo, California-based market- The new phone is designed for York-based Verizon Communications research firm. families and basic business users, Inc. and the U.K.’s Group “The U.S. market is definitely according to ZTE documents. The so- Plc. Dallas-based AT&T is the second- ZTE’s most important and strategic called slider phone has a 1.3-megapixel largest U.S. wireless carrier, followed by market,” said Ji, who helped expand camera, a 2.4-inch display and a Web Overland Park, Kansas-based Sprint. ZTE in Europe before moving to the browser, and allows for text, picture

22 ZTE TECHNOLOGIES September 2010 Solution

Driving Rapid Growth of Tri-Network Convergence with xPON+EoC Solution

By Xue Qikang and Lin Kai

ecause telecom, radio and of tri-network convergence, and a large launched its Ethernet over Coax (EoC) TV, and Internet networks number of radio and TV subscribers products in compliance with ITU Bexist separately in China, in greatly increase VoIP revenue. IPTV G.9954. In 2009, research began into January 2010, the State Council passed is a video service that will also grow EoC based on IEEE P1901 standards, a general proposal for tri-network rapidly after tri-network convergence and this passed the xPON+EoC test convergence. Tri-network convergence because all users can enjoy it. With conducted by China Mobile. In 2010, is a broad concept which does not the rapid development of 3G wireless ZTE developed the industry’s first imply the physical convergence of communication technologies, mobile carrier-class EoC equipment. ZTE, telecom, Cable TV (CATV), and TV services have been gradually China’s largest xPON equipment Internet networks, but rather the accepted. IPTV based on tri-network vendor, is sparing no effort to help convergence of high-level service convergence has become the focus of operators build an integrated, carrier- applications. In technical terms, the attention in the mobile video field. class xPON+EoC solution that is three networks must adopt universal Apart from broadcast TV, multicast operable, manageable, and profitable. IP protocols and be interoperable at Video On Demand (VOD) is watched the network layer. by many people. The large number of xPON+EoC Solution To provide converged multimedia mobile users with VOD is a potential CATV operators own video brands, voice, data, and image services, source of profit for operators. In their and have largest base of CATV users network operators are attempting to daily lives, people seek information, (including more than 160 million undergo technical transformation entertainment, and education through in China). Telecom operators have as they compete and cooperate with their mobile phones, and hope to enjoy abundant Internet resources, mature each other. Triple Screen Delivery— high definition video on the home TV service operation and management delivery of multimedia content to screen. These services improve user platforms, and well-established brands mobile phone, PC, satellite or digital loyalty and drive the growth of tri- in the telecom sector. Telecom and —is the simplest application network convergence. CATV operators are therefore in a of tri-network convergence. People win-win situation; resources can be can make phone calls, watch videos, World’s First Carrier-Class EoC shared and the advantages of each or access high-speed Internet via Equipment can be complementary in the joint mobile phone, TV, or PC. ZTE places great importance on development of the family broadband tri-network convergence, and has market. Service-Driven Growth invested heavily in the xPON+EoC With the trend towards optical VoIP is a basic service requirement solution. Early in 2008, the company access, Hybrid Fiber-Coax (HFC)

September 2010 ZTE TECHNOLOGIES 23 Solution

networks bring fiber even closer to end users and each optical covers fewer users. CATV broadband CATV/VOD EMS Internet access networks are restructured on Coaxial Cable existing HFC network structures. UTP Category 5 As illustrated in Figure 1, an Optical Optical Sender IP MAN Video and Line Terminal (OLT) is placed in Audio Cable Optical Splitter the data center. Coax Bandwidth OLT Access Terminals (CBATs)—which Residential Residential integrate Optical Network Unit (ONU) CATV Optical Optical Splitter CATV Optical Optical Splitter Station Station and Cable Line Terminal (CLT) Corridor ONU+OLT Splitter functions (ONU+CLT)—are placed in ONU+OLT Splitter residential CATV stations or corridors, CNU CNU CNU CNU and Coax Network Units (CNUs) STB STB STB STB are placed in homes as modems for data decomposition and combination. Household Household Household Household Deployment of xPON+EoC is divided into service introduction stage and service maturity stage. Figure 1. xPON+EoC network architecture.

Service introduction stage In the service introduction stage, fast service deployment, and minimal as broadband Internet access and operators are concerned about change to the original network. VoIP high definition digital TV (10-30MB) lowering construction costs and services are offered, and users are are offered. Operators can restrict rapid service provision. With these in given 5-10MB bandwidth capacity. It bandwidth according to the user’s mind, ZTE provides the most cost- also provides Internet access (1-4MB service subscriptions. efficient solution in the initial stage bandwidth), and supports digital TV. Since xPON+EoC makes few of deployment because it does not changes to the HFC network, CATV radically alter the original network. Service maturity stage operators can effectively reduce OLT can be deployed at the data As the network develops, EoC CAPEX and OPEX. This solution center, and CBAT (or ONU+CLT) access is gradually accepted by users, is in line with the IP development in residential CATV stations. One and service demands increase rapidly trend and is applicable to tri-network ONU is connected to one or more within a short period of time. It convergence in China. CLTs via a UTP Category 5 cable therefore becomes necessary to change (within 100 meters). The usual the original network. The number of ZTE―the largest vendor of xPON distance between CBAT and end users at each CBAT must be decreased equipment worldwide―has launched users is about one kilometer. CNUs because in the maturity stage, the a range of integrated EoC equipment can be placed on users’ desks, so that bandwidth allocated to each user for HFC network reconstruction. This changes to the network are minimized. increases significantly from 1-4MB to equipment has been highly recognized Low penetration in the initial stage 10-30MB. Since the output bandwidth in the industry for its interoperability of service fulfillment means that of CBAT is fixed, to increase the with xPON and unified network equipment capacity need not exceed bandwidth for each user, the number management. It has been widely 64 lines. To attract more users, a wide- of users is reduced from 64 to 10-40. applied by domestic and international area coverage mode is adopted in the The distance between CBAT and end CATV operators including Thailand network. users is about 300 meters. Because True, China Telecom, China Mobile, The above solution has the of the higher penetration rate at this , and Hanzhou China advantages of low construction cost, stage, higher bandwidth services such Digital TV.

24 ZTE TECHNOLOGIES September 2010 Case Study

Turk Telekom on the Road to Fixed Network Transformation By Zhang Wenchao

Disadvantages of the Traditional Telekom carefully began planning the ZTE’s advanced and mature all-IP Network transformation of its networks from core network program was wholly stablished in 1847, Turk TDM to IP. This transformation would satisfactory for the task of evolving Telekom is the largest occur in 7 stages over 4 years. their networks. ZTE is an ideal partner Eintegrated operator in Turkey, to shoulder such responsibility. The the fifth largest fixed network operator The Most Challenging Transformation company provides total next-generation in Europe, and the thirteenth largest Program in the Industry network (NGN) solutions including fixed network operator in the world. It Evolution and development of IMS core network, service platform, owns 95% of Turkey’s fixed network an entire network is important in an MSAN, and high-capacity trunking resources including copper, fiber, and operator’s overall strategy. Partners are gateways, as shown in Figure 1. PSTN access points, and provides required to have cutting-edge technology, fixed-line, transmission, and data reliable delivery, rich experience, and Total NGN Solutions Playing a Role network services. In the third quarter comprehensive strength. Turk Telekom’s Drawing on its extensive experience, of 2009, Turk Telekom had around fixed network transformation program ZTE devised tailor-made solutions 17 million PSTN users and over 12 is characterized by its large-scale and for Turk Telekom’s new network. million GSM users. complex architecture. It has become the Twenty sets of core control devices As Turk Telekom’s networks have largest program of its kind in Europe are designed to cover the whole of developed, the disadvantages of with 31 physical sites and over 17.5 the country, and several sets of media traditional PSTN—such as aging, large million lines. gateways and signaling gateways are size, high power consumption, and lack In September 2007, bidding for designed to connect with the existing of new value-added services—have the project was opened, and would network. ZTE’s NetNumen UNMS is become apparent. Many employees involve two-years of strict testing used for unified network management. are required for day-to-day operation and selection. ZTE and seven other These solutions will allow Turk and maintenance, and this increases device manufacturers participated in Telekom to kick-start its all-IP operating expenditure (OPEX). the bidding. After careful evaluation, transformation. The new network will With these issues in mind, Turk Turk Telekom concluded that feature the following:

September 2010 ZTE TECHNOLOGIES 25 Case Study

TT Network Sailing Smoothly into a New Ocean of Business Transformation NMS VAS Platform Billing Center ZTE’s all-IP architecture, large capacity products, and total NGN solutions are designed to fully HSS PSS CSCF CG implement large-scale network

Other Broadband MGCF/AGCF/SoftSwitch transformation. ZTE’s fixed network Networks transformation program with IP Bactbone enhanced functions can work with Other Carrier traditional terminals such as POTS, PSTN TG/SG MSAN SBC V5, ISDN BRI/PRI, and H.323. Original services are inherited and Other Carrier PLMN improvements made so that users LAD Home POTS IP Phone PC Cllent Gateway PC Cllent have a consistent service experience. Local Exchange MSAN Seamless connection with existing CPE POTS PC Cllent POTS POTS POTS IP Phone PC Cllent network OSS/BSS is also supported. ZTE’s extensive global experience Figure 1. Architecture of Turk Telekom’s fixed network transformation. in network transformation and IP implementation is vital to the success ■ A completely new and flattened Broadband (VoBB), Voice Call of the project. Turk Telekom is thus NGN architecture: This will Continuity (VCC), Converged positioned for a comprehensive greatly reduce Turk Telekom’s One Number, Converged Centex, business transformation, rapidly OPEX and CAPEX. Unified Message Service (UMS), responding to user demands for new ■ Smooth evolution: The new Multimedia Messaging Service telecommunications services, and network inherits all existing PSTN (MMS), Multimedia Ring Back consolidating its leading market services, but also supports richer Tone (MRBT), and Number position by providing rich, integrated integrated multimedia broadband Portability (NP). This will help multimedia broadband services. services such as Voice over Turk Telekom lead the local market.

ZTE Wins Fixed Network Transformation Contract with Turk Telekom

July 5, 2010 Source: totaltele.com ZTE has been selected by Turk Telekom, the fifth largest fixed network operator in Europe, as the sole supplier of core network equipment and services for a nationwide all-IP network transformation project. The total capacity of the network will be 17.5 million lines with more than 31 sites, making it the world’ s largest ever fixed network replacement contract. ZTE will deliver a comprehensive next generation solution including an IMS core network, a comprehensive service platform, MSAN and large-capacity trunking gateways. The network will enable Turk Telekom to launch experience-rich converged services including VoBB, VCC, Converged One Number, Converge Centrex, UMS, MMS, MRBT and NP. “ZTE’s cutting-edge next generation all-IP core network solution fully meets Turk Telekom’s requirements of migrating its legacy PSTN to a converged multi-service network which will enable the operator to rapidly complete its business transformation and maintain the leading position in the local market,” said Mr. Xu Ziyang, President of Core Network Product, ZTE Corporation.

26 ZTE TECHNOLOGIES September 2010 News Brief

ZTE Helps UCell Launch 4G Network in ZTE and Iberbanda Uzbekistan Deploy Spain’s 9 August 2010, Shenzhen, China During the test in the nation’s capital ― ZTE is announcing that a 4G (LTE) Tashkent, ZTE and UCell demonstrated First WiMAX network constructed for Uzbekistan high-speed Internet access, streaming mobile operator UCell (trademark of video, file uploads and downloads, 802.16e Network FE COSCOM LLC)―a subsidiary of Internet browsing and VoIP services by TeliaSonera telecommunications group using ZTE’s LTE equipment. for Residential and and one of the pioneers deploying the “We are proud that Uzbekistan has LTE network within the Commonwealth become one of the few countries in the Enterprise Market of Independent States area―has been world utilizing the 4G network. As a 4 August 2010, Shenzhen, successfully deployed with ZTE’s part of TeliaSonera, a company with China ― ZTE announced today prominent SDR technology and Uni- over a hundred years of experience in the deployment of Spain’s first RAN solution. The network is able to telecommunications, we are committed WiMAX 802.16e network with achieve a downloading peak rate of up to to delivering state-of-the art technologies Iberbanda, a Spanish broadband 100Mbps. and an excellent wireless data experience telecommunications operator. With ZTE’s industry leading SDR to our customers,” commented The deployment was executed solution, UCell will be able to provide UCell Chief Executive Officer Oguz in the Spanish regions of Galicia superior 4G services for its subscribers. Memiguven. on the north-west coast of the country and neighboring Asturias. The initiative will provide high- speed broadband access services. The deal follows an existing ZTE Tops the Global CDMA Market with a 30% agreement signed between ZTE and Iberbanda in December 2009 Market Share to supply 500 WiMAX base 18 August 2010, Shenzhen, China future networks before evolving into a stations for two years to provide ― ZTE has been ranked as the leading commercial LTE system. high-speed broadband services to vendor of CDMA BTS by IDC. ZTE has also steadily enhanced the rural parts of Spain. IDC’s 2010 Global CDMA Market overall competitiveness of its CDMA ZTE has built the largest 2.3G and Prospects research note said that products. It has consolidated its WiMAX commercial network by Q1 2010, ZTE had shipped an lead in the key emerging markets of in Southeast Asia with 170,000 accumulated total of over 250,000 base China, Indonesia and India, and made subscribers. stations, allowing the Chinese company breakthroughs in North America. In As of June 2010, ZTE has to claim the No. 1 spot in the CDMA the Chinese market in 2010, ZTE has successfully rolled out 59 WiMAX market with a global share of 30.3%. undertaken over 80% of the work to networks in 41 countries. ZTE’s As one of a few companies in the migrate Nortel and Motorola CDMA equipment has been supplied to world that still makes large-scale equipment. Following this seamless high-end markets such as the inputs into CDMA technology, ZTE transition, network performance has been USA, Japan and Europe. In 2009, understands the importance of the greatly improved. ZTE has therefore ZTE was ranked among the top CDMA market. ZTE is the first vendor won recognition from China Telecom three WiMAX vendors worldwide in the industry to launch the CDMA/ for its outstanding engineering control, in terms of new network LTE dual mode system which will be execution and delivery abilities in the deployment by Frost & Sullivan. able to achieve a smooth upgrading of migration process.

September 2010 ZTE TECHNOLOGIES 27 News Brief

ZTE and VIVO Strengthen Partnership with the Announcement of Two New Exclusive Mobile Phones The X850 with Android platform and the X990 with Windows Life application

16 August 2010, São Paulo, ― With its sophisticated design, the new ZTE and VIVO, the largest mobile operator phone aims to give customers fast and easy in Brazil, announced a partnership to launch access to MSN messenger. two new mobile phones in the Brazilian ZTE’s first mobile phone with Google’s market. Android platform in Brazil, the ZTE X850, The two new phones are the ZTE is a display-touch phone with fast 3G X850―ZTE’s first Android handset internet access that carries Google services in Brazil―and the ZTE X990, which such as Google Search, Gmail, Youtube, customers can find at VIVO’s stores at a Google Maps, Google Talk, Google special sale price of R$299,00 in a pre-paid Calendar and e android Market. The X850 plan. also has GPS, a 3.2MP camera and an The ZTE X990 comes with a 2.0 e-mail system. megapixel camera, FM radio and MP3 “The profile of these new mobiles player. It supports Java applications and also is aligned with our strategy to provide has a video and audio recorder. For the first the best solutions in order to keep our 30 days, subscribers will be able to send customers connected,” said Hilton Mendes, 100 complimentary SMS texts and access Director of Terminal Development at Windows Life at no cost. VIVO.

Telenor Hungary Commissions ZTE to Build Hungary’s First LTE-Ready Network Unified GSM/UMTS/LTE network to be deployed in Hungary

23 August 2010, Shenzhen ― ZTE today announced a contract eNodeBs throughout the country. With its SDR-based solution, with Telenor Hungary, a subsidiary of one of the world’s largest ZTE will help Telenor Hungary achieve a unified 2G/3G/LTE core telecommunications operators, Telenor Group, to build a GSM/ network, supporting multi-mode and multi-band wireless services. UMTS/LTE network in Hungary. ZTE will provide the company This technology eliminates the need for further infrastructure with radio and core infrastructure over the next five years, including upgrades, providing the operator with the flexibility to roll-out new its industry leading End-to-End and Uni-RAN solutions. services and a smooth evolution path to LTE. “As part of our vision of a Digital Hungary, we predict a growing “This agreement with Telenor Hungary marks another major need for simple-to-use, value-for-money mobile communications breakthrough in the European market for ZTE’s Uni-RAN services across Hungary, especially mobile broadband and we now technology and further cements our partnership with Telenor. With see that the time has come to switch to the next gear and take the ZTE’s unified network, Telenor Hungary will have the flexibility lead in providing even faster and even more reliable services to our to upgrade its network as new services are rolled-out, preparing it customers,” said Anders Jensen, CEO of Telenor Hungary. for the imminent 4G era,” said Kenneth Fredriksen, GM of ZTE’s ZTE will switch, expand and operate the GSM/UMTS/LTE Telenor Business Unit. network and deploy over 6,000 base stations, including LTE

28 ZTE TECHNOLOGIES September 2010 September 2010 ZTE TECHNOLOGIES 29 30 ZTE TECHNOLOGIES September 2010