2.5G to 3G Migration Critical Success Factors www.huawei.com Presented by: Moheb Adel Ramses Technical Director, Mobile Networks MENA Region The 8th Arab Telecom and Internet Forum Shangri-La's Resort, Muscat - Oman 24 -25 May 2006 Overall Evolution and Industry Trend Reachable Integration Coverage Capacity New Services Broadband Best Connected User needs and Services oriented Non-Voice operation $ Transfer to content Voice operation Pay for Content Pay for media access Medium=Service M2M etc. ~2002 1990 2010 Access business and Services business break up Source: HUAWEI HUAWEI TECHNOLOGIES CO., LTD. Page 2 Wireless Network Trends Unified Network Architecture Soft-switch IP CN IMS IP UTRAN Flat Enhanced IMS E2E IP RNC LTE Converged ALL IP Ultra-high speed Radio Access HSDPA HSUPA WIFI Indoor coverage UMA WiMAX Ubiquitous coverage OFDM MIMO Higher Spectrum efficiency Various access technology Low Cost Terminal Dual Band Dual Mode Multi Band Multi Mode Multi Media Converged Software Defined Radio Online Reconfigurable Intelligent Integration Time The wireless networks converge in the core network and the terminal. Wireless access adds value to services, and users will choose best value connection. Usage goes indoor! More than 70% traffic has moved from highway to hallway HUAWEI TECHNOLOGIES CO., LTD. Page 3 RAN Evolution Trends WiFi UMA/WiMAX 3GPP UMTS WCDMA and CDMA2000 have very similar RAN migration roadmaps. 3GPP2 Source: Qualcomm CDMA2000 HUAWEI TECHNOLOGIES CO., LTD. Page 4 Core Network Evolution Trends Softswitch MSC (R4)/LMSD Legacy MSC (R99) IMS/MMD (R5/R6) CSCF MSC Server MSC Server MGCF MGCF MISUP MSC MSC TDM Divided into MSC Server & MGW CDMA BSS/ UMTS RAN PSTN H.248 MGW PSTN SIP-T TDM/IP SIP H.248 MGW CDMA BSS/ UMTS RAN H.248 MGW H.248 IP PSTN UMTS and CDMA2000 also have very similar core network migration roadmaps. Soft-Switch is the optimum structure for voice IMS is the optimum structure for multimedia service SoftSwitch and IMS will coexist for a long time CS (+ PS) CS + IMS (+ PS) HUAWEI TECHNOLOGIES CO., LTD. IMS (+ PS) Page 5 MGW CDMA BSS/ UMTS RAN GSM Market Growth 140 35.00% 120 30.00% 100 25.00% 80 20.00% 60 15.00% 40 10.00% 20 5.00% 0 0.00% Annual Change(%) Subs(Million) Forecast of MENA Subs 2004 2005 2006 2007 2008 2009 Total Subs Annual Change Source: Informa Source: EMC World Cellular Database, Dec 2004 The number of GSM subscribers will exceed 2 billion by the end of 2007 Lower End-to-End cost is the main strength of GSM networks ME&NA is still the fastest growing mobile market Voice and SMS are and will still be the main source of revenue for quite a long time HUAWEI TECHNOLOGIES CO., LTD. Page 6 3G, a new engine to improve ARPU Subscribers (Million) Number of networks 350 400 300 250 Number of Subscribers 350 Number of Networks 300 250 200 200 150 150 44.6 millions Subs 83 UMTS networks 100 100 50 50 0 0 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 UMTS subscribers number hit 44.6 million worldwide by the end of 2005, an increase of 161% on the figure at the end of 2004. Source: www.3gtoday.com Dec-08 Today, there are 108 commercial WCDMA operators in 47 countries. The majority are enabling HSDPA in their networks as the new baseline for 3G globally (www.gsacom.com ) Green field UMTS networks are still facing relatively high price terminals GSM operators in MENA launch UMTS networks focusing on data services for high end users, despite the poor take-up of their 2.5G data services There is generally a limited amount of money available from users to increase the total revenues of operators HSDPA availability is currently boosting the 3G deployment, allowing a net differentiation between 2.5 and 3G services. HSDPA gathers momentum in the MENA, especially in the Gulf countries like UAE, Kuwait, Bahrain, Oman, etc … HUAWEI TECHNOLOGIES CO., LTD. Page 7 Migration Opportunities and Challenges How to balance 2G Network Expansion versus New 3G Service Launch? How to deploy UMTS step by step ? How to reduce TCO to optimize the revenues of the resulting network. GSM operators should plan to make 3G an “Evolution” rather than “Migration” HUAWEI TECHNOLOGIES CO., LTD. Page 8 TCO Saving in Lifecycle 80000 70000 60000 50000 40000 30000 20000 10000 0 CAPEX OPEX CAPEX 38% OPEX 62% (k EUR) OPEX year 9 year 8 year 7 year 6 year 5 year 4 year 3 year 2 year 1 CAPEX OPEX represents more than half of the total cost of ownership. Rental, power consumption, leased lines and human resources are major parts of OPEX TCO reduction is generally “Crucial”, especially at this stage of 3G deployment HUAWEI TECHNOLOGIES CO., LTD. Page 9 Optimized Migration Plan Shared Core Networks save CAPEX, OPEX and Improve Quality As a considerable step towards 3G deployment, we recommend GSM operators to adopt R4 Soft-switch architecture whenever they are: • Deploying a new GSM network for a new license • Expanding the core network for an existing GSM network • Swapping legacy GSM MSC Huawei Mobile Soft Switch and Packet CN achieve 2G/3G Convergence HUAWEI TECHNOLOGIES CO., LTD. Page 10 Optimized Migration Plan New Technologies Reduce TCO in Node B Making maximum use of advanced Node B technologies considerably reduce TCO: •Integrated Digital PA; higher power efficiency with lower power consumption •Multi Carrier Transceivers; software capacity expansion •Full HSDPA performance; lower cost per bit. Macro indoor Macro Outdoor •Open CPRI interface; lower industrial chain cost •Distributed Node B; easier site acquisition, installation and transportation Pico Node B Mini Node B Distributed NodeB RRU Optical Fiber CPRI BBU 19 inch box HUAWEI TECHNOLOGIES CO., LTD. Page 11 Optimized Migration Plan Balanced Transmission Cost and QoS with Hybrid Transmission E1 for CS Services and High QoS PS services E1 Node B IP network RNC IP Network for best effort PS services Balance of transmission cost saving and QoS guarantee Most efficient transmission solution for HSDPA Transmission Resource Whole price E1 Transmission 4E1 € 19200/year Hybrid IP Transmission 2*ADSL + 1E1 € 5760/year Unit Price: E1: €4800/year, ADSL:€480/year 40%-80% Transmission rental can be saved! HUAWEI TECHNOLOGIES CO., LTD. Page 12 Optimized Migration Plan Go Broadband today with HSDPA Cost per MB: HSDPA =35% Peak data rate: HSDPA = 700% HSDPA provides lower cost per bit, clearly differentiate 3G from 2G services to the end user. HUAWEI TECHNOLOGIES CO., LTD. Page 13 Optimized Migration Plan Speed Up Introducing Attractive 3G based Applications TV Programs Example: Mobile TV Huawei Cell Multimedia Broadcast (CMB): All users share a common channel (FACH) Fewer resources occupied but higher revenue for operators Low cost and good experience for end users Smooth evolution to MBMS CMB allows a pre-MBMS cost effective solution for Mobile TV and other broadcasts. HUAWEI TECHNOLOGIES CO., LTD. Page 14 Optimized Migration Plan Cooperation with suppliers for Affordable and Customized User Terminals At this stage, it is strongly recommended that operators cooperate closely with terminals’ suppliers to provide affordable customized handsets. Huawei has focused on designing chipsets for Multi-platform solution to reduce the cost of low end terminals Cooperate closely with operators for customized handsets U526 U626 U636 U526 E600 HUAWEI TECHNOLOGIES CO., LTD. E618 customized for Vodafone Page 15 E620(HSDPA) About Huawei 3G:Global UMTS Applications Area Europe Contract Reference 12 …… P4 Asia Pacific 9 NTS …… Middle East & Africa 7 …… • Achieved 28 UMTS commercial contracts by the end of April 2006 • Deployed over 50 pilot networks worldwide. • 22% Market share of Total Awarded Contracts in 2005. HUAWEI TECHNOLOGIES CO., LTD. Page 16 About Huawei 3G:Global CDMA2000 Applications Global Footprint of Huawei CDMA China Thailand Mexico Russia Pakistan Nigeria Bangladesh Yemen Over 40 M subscribers 19 CDMA2000 1xEV-DO commercial applications 15 CDMA SoftSwitch commercial applications serving 10 M subscribers over 65% global market share in CDMA450 68% global market share in CDMA WLL HUAWEI TECHNOLOGIES CO., LTD. Page 17 Conclusion The trend of telecom industry is evolving from Network Based to Customer and Services Based. Despite the competition between UMTS and CDMA2000 as the two favorite 3G technologies, they do share a lot of similarities in their Capabilities and Roadmaps. Shared Core Networks for 2G and 3G – whether Circuit core based on R4 softswitch or Packet core - is a major step towards a smooth migration, optimizing CAPEX and OPEX as well as improving QoS. A set of new advanced technologies in the 3G Node B’s considerably help the operators to reduce the TCO while improving the overall performance. Hybrid TDM/IP transmission is currently the favorite solution to balance the high speed data transmission requirements and the cost of transmission resources. Huawei strongly encourages operators to differentiate their 3G capabilities with innovative and attractive applications (especially with HSDPA mature availability), and to cooperate with handsets suppliers for affordable and customized user terminals. Huawei has achieved a remarkable global presence and leadership in the mobile industry, witnessed by the wide global applications of Huawei GSM/GPRS/EDGE/UMTS/CDMA2000 1x/DO networks. HUAWEI TECHNOLOGIES CO., LTD. Page 18 Thank You www.huawei.com
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