2.5G to 3G Migration

www.huawei.com

Critical Success Factors

2.5G to 3G Migration

The 8th Arab Telecom and Internet ForumThe 8th Arab Telecom and Internet ForumShangri-La's Resort, Muscat - OmanShangri-La's Resort, Muscat - Oman24 -25 May 200624 -25 May 2006

Presented by: Moheb Adel RamsesTechnical Director, Mobile Networks

MENA Region

HUAWEI TECHNOLOGIES CO., LTD. Page 2

Overall Evolution and Industry Trend

Access business and Services business break up

Source: HUAWEI

Best ConnectedReachable Integration

User needs and

Services oriented

Coverage

CapacityNew Services

Broadband

M2M etc.

~2002 2010

$

Medium=Service

Pay for media access

Voice operation

Transfer to content

Non-Voice operation

1990

Pay for Content


Wireless Network TrendsUnified

Flat

Converged

ALL IP

TimeTime

Network

Architecture

Radio

Access

Radio

Access

TerminalTerminal

IMSIP UTRAN

Enhanced IMSE2E IP

RNC LTE

Soft-switchIP CN

Ultra-high speed

Ubiquitous coverage

Higher Spectrum efficiency

Various access technology

Low Cost

Indoor coverageUMA

WiMAX

OFDMMIMO

HSDPAHSUPA

WIFI

Multi BandMulti ModeMulti Media

SoftwareDefined Radio

OnlineReconfigurable

Dual BandDual Mode

Converged

Intelligent

Integration

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


RAN Evolution Trends

Source: Qualcomm

3GP

P2

3GP

P

WCDMA and CDMA2000 have very similar RAN migration roadmaps.

UMTS

CDMA2000

WiFiWiFi UMA/WiMAXUMA/WiMAX


Core Network Evolution Trends

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

TDM/IP

MSC Server

PSTN

MGW MGW

H.248 H.248SIP-T

Softswitch MSC (R4)/LMSD

MSC Server

TDM

MSC

PSTN CDMA BSS/UMTS RAN

MISUP

Legacy MSC (R99)

MSC Divided into MSC Server &

MGW IP

MGCF

PSTN

MGW MGW

H.248 H.248

SIP

MGCF

CSCF

CDMA BSS/UMTS RAN

CDMA BSS/UMTS RAN

IMS/MMD (R5/R6)

CS + IMS (+ PS) CS (+ PS) IMS (+ PS)


GSM Market Growth

Forecast of MENA Subs

0

20

40

60

80

100

120

140

2004 2005 2006 2007 2008 2009

Sub

s(M

illio

n)

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Ann

ual C

hang

e(%

)

Total SubsAnnual Change

Source: EMC World Cellular Database, Dec 2004Source: EMC World Cellular Database, Dec 2004

The number of GSM subscribers will exceed 2 billion by the end of 2007The number of GSM subscribers will exceed 2 billion by the end of 2007Lower End-to-End cost is the main strength of GSM networksLower End-to-End cost is the main strength of GSM networksME&NA is still the fastest growing mobile marketME&NA is still the fastest growing mobile marketVoice and SMS are and will still be the main source of revenue for quite a long time Voice and SMS are and will still be the main source of revenue for quite a long time

Source: InformaSource: Informa


3G, a new engine to improve ARPU

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.

Today, there are Today, there are 108 commercial WCDMA operators in 47 countries108 commercial WCDMA operators in 47 countries. The majority are enabling HSDPA in their networks . The majority are enabling HSDPA in their networks as the new baseline for 3G globally (as the new baseline for 3G globally (www.gsacom.com )

Green field UMTS networks are still facing relatively high price terminalsGreen 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 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 their 2.5G data services There is generally a limited amount of money available from users to increase the total revenues of operatorsThere 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 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 …HSDPA gathers momentum in the MENA, especially in the Gulf countries like UAE, Kuwait, Bahrain, Oman, etc …

0

50

100

150

200

250

300

350

Dec- 03 Dec- 04 Dec- 05 Dec- 06 Dec- 07 Dec- 08

0

50

100

150

200

250

300

350

400

Subscribers (Million) Number of networks

44.6 millions Subs

83 UMTS networks

Number of Subscribers

Number of Networks

Source: www.3gtoday.comSource: www.3gtoday.com


Migration Opportunities and Challenges

How to balance 2G Network Expansion versus New 3G Service Launch?How to balance 2G Network Expansion versus New 3G Service Launch? How to deploy UMTS step by step ?How to deploy UMTS step by step ? How to reduce TCO to optimize the revenues of the resulting network.How to reduce TCO to optimize the revenues of the resulting network.

GSM operators should plan to make 3G an

“Evolution” rather than “Migration”


CAPEX38%

OPEX62%

CAPEX OPEX

TCO Saving in Lifecycle

OPEX represents more than half of the total cost of ownership.

Rental, power consumption, leased lines and human resources are major

parts of OPEX

01000020000300004000050000600007000080000

year 1

year 2

year 3

year 4

year 5

year 6

year 7

year 8

year 9

CAPEXOPEX

(k EUR)

TCO reduction is generally “Crucial”, especially at this stage of 3G deployment


Optimized Migration Plan Shared Core Networks save CAPEX, OPEX and Improve Quality

Huawei Mobile Soft Switch and Packet CN achieve 2G/3G Convergence

As a considerable step towards 3G As a considerable step towards 3G deployment, we recommend deployment, we recommend GSM GSM operators to adopt R4 Soft-switch operators to adopt R4 Soft-switch architecturearchitecture whenever they are: whenever they are:

• Deploying a new GSM network for Deploying a new GSM network for a new licensea new license

• Expanding the core network for an Expanding the core network for an existing GSM networkexisting GSM network

• Swapping legacy GSM MSCSwapping legacy GSM MSC


Macro indoor

Optimized Migration PlanNew Technologies Reduce TCO in Node B

Macro Outdoor

Mini Node B

Pico 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.

•Open CPRI interface; lower industrial chain cost

•Distributed Node B; easier site acquisition, installation and transportation

Optical FiberCPRI

BBU19 inch box

RRU

Distributed NodeB


E1 for CS Services and High QoS PS services

IP Network for best effort PS services

40%-80% Transmission rental can be saved!

RNC Node BIP network

E1

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

Optimized Migration PlanBalanced Transmission Cost and QoS with Hybrid Transmission


Peak data rate:HSDPA = 700%

Cost per MB: HSDPA =35%

HSDPA provides lower cost per bit, clearly differentiate 3G from 2G services to the end user.

Optimized Migration PlanGo Broadband today with HSDPA


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.

Optimized Migration PlanSpeed Up Introducing Attractive 3G based Applications


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

U626 U636 U526 E600E618 customized

for Vodafone

U526E620(HSDPA)

Optimized Migration PlanCooperation with suppliers for Affordable and Customized User Terminals


About Huawei 3G:Global UMTS Applications

• 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.

P4P4

NTSNTS

……

……

……

Europe 12

Asia Pacific 9

Middle East 7& Africa

Area Contract Reference


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

MexicoMexico NigeriaNigeria

Pakistan

Yemen

BangladeshThailandThailand

RussiaRussia

ChinaChina

Global Footprint of Huawei CDMA

About Huawei 3G:Global CDMA2000 Applications


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.

Thank You

www.huawei.com

Documents

2.5G to 3G Migration