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 Best Connected

Coverage New Services User needs and
Capacity Broadband Services oriented

Non-Voice operation
$
Transfer to content

Voice operation
Pay for Content
Pay for
media
access
Medium=Service
M2M etc.
1990 ~2002 2010

Access business and Services business break up

Source: HUAWEI

HUAWEI TECHNOLOGIES CO., LTD. Page 2

 Wireless Network Trends
Unified
Enhanced IMS Flat
Network Soft-switch IMS
E2E IP Converged
Architecture IP CN IP UTRAN
RNC LTE
ALL IP

Ultra-high speed

HSDPA Indoor coverage Ubiquitous coverage

Radio OFDM
HSUPA UMA Higher Spectrum efficiency
Access MIMO
WIFI WiMAX Various access technology
Low Cost

Software Converged
Multi Band
Terminal Dual Band Defined Radio Intelligent
Multi Mode
Dual Mode Online
Multi Media Integration
Reconfigurable

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
Legacy MSC (R99) Softswitch MSC (R4)/LMSD IMS/MMD (R5/R6)
CSCF
MSC Server MSC Server MGCF MGCF

MISUP
SIP
MSC MSC Divided SIP-T
into MSC H.248 H.248
H.248 H.248
Server &
TDM MGW MGW TDM/IP MGW MGW IP MGW

CDMA BSS/ CDMA BSS/ CDMA BSS/

PSTN
UMTS RAN PSTN UMTS RAN PSTN UMTS RAN

 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) IMS (+ PS)

HUAWEI TECHNOLOGIES CO., LTD. Page 5

 GSM Market Growth
Forecast of MENA Subs
140 35.00%

120 30.00%

Annual Change(%)
100 25.00%

Subs(Million)
80 20.00%

60 15.00%

40 10.00%

20 5.00%

0 0.00%
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 Number of Subscribers 350

UMTS subscribers number
hit 44.6 million worldwide
Number of Networks 300
250

by the end of 2005, an

250
200
200
150
150
increase of 161% on the
100
44.6 millions Subs
83 UMTS networks 100
figure at the end of 2004.
50 50
Source: www.3gtoday.com
0 0
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 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 CAPEX
50000 38%
CAPEX
40000
OPEX OPEX
30000
20000 62%
(k EUR)
10000
CAPEX OPEX
0
year 1
year 2
year 3
year 4
year 5
year 6
year 7
year 8
 OPEX represents more than half of the total cost of ownership. year 9
 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

RNC IP network Node B

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: Peak data rate:

HSDPA =35% 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
E618 customized E620(HSDPA)
U626 U636 U526 E600 for Vodafone

HUAWEI TECHNOLOGIES CO., LTD. Page 15

About Huawei 3G:Global UMTS Applications
Area Contract Reference

Europe 12
……
P4

Asia Pacific 9 NTS

……

Middle East 7
& Africa ……

• 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 Pakistan Bangladesh

Russia Mexico Nigeria 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