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VIP Voice3ZTE Banks on Upmarket ExpansionZTE is looking to move upmarket and expand sales overseas.The company aims to broaden its device offerings withsmartphones and tablet computers and to land higher-profilenetwork-gear deals on North America. Wei Zaisheng, CFO ofZTE, spoke to reporter of Wall Street Journal Owen Fletcherabout challenges of managing a growing global telecombusiness.3Tech Forum66Transformation Oriented Core Network Development andEvolutionIn the transformation from service control to application capabilityprovision, the core network acts as network middleware thatabstracts infrastructure resources, network capabilities, and basicfunctions for all service applications.Operation Insight99Asia-Pacific FTTx Business ModelBy building smart pipes and extending the value of “cloud andterminals,” many operators in Asia-Pacific have successfullytransformed their broadband networks.Solutions12Smart Pipe Solution in Mobile Internet EraFor sustainable business growth in line with Internet growth, ZTEhas launched ZSP—a complete smart pipe solution that can helpoperators build an open, garden-like mobile Internet eco-environment.14 1417zVOA: Empowering Converged Voice and Multimedia ServicesMAB: Building Low-Cost High-Speed Mobile Broadband20New Choices for Network O&M

Success Stories2224Telefonica Leads Broadband Growth in LatinAmericaBenefiting from ZTE’s efficient product customization andfast delivery capability, Telefonica succeeded in quicklyexpanding its broadband services throughout LatinAmerica.SSTL Sets a Benchmark for Network O&M in IndiaEditorial BoardEditor-in-Chief: Jiang HuaDeputy Editor-in-Chief: Huang XinmingEditorial Director: Zhao LiliExecutive Editor: Yue LihuaEditor: Paul SleswickCirculation Manager: Wang PingpingSubscription / Customer ServicesSubscription to ZTE TECHNOLOGIESis free of chargeTel: +86-551-5533356Fax: +86-551-5850139Email: wang.pingping@zte.com.cnWebsite: wwwen.zte.com.cn/endata/magazineThird Eye2622Insights on 2010 Market PerformanceAccording to the survey by Frost & Sullivan, ZTE has thehighest CAGR among the top 5 vendors in the globalmarket, with 28.01% CAGR from the year 2008 to 2010 and37.48% among 2006--2010.News Brief272824ZTE Showcases Industry’s First MAB Live DemoPartners ZTE and KPN Mobile International Announce LTE TrialsEditorial OfficeAddress: NO. 55, Hi-tech Road South,ShenZhen, P.R.ChinaPostcode: 518057Tel: +86-755-26775211Fax: +86-755-26775217Email: yue.lihua@zte.com.cnZTE ProfileZTE is a leading global provider oftelecommunications equipment and networksolutions. It has the widest and most completeproduct range in the world—covering virtuallyevery sector of the wireline, wireless, serviceand terminals markets. The company deliversinnovative, custom-made products andservices to over 500 operators in more than140 countries, helping them achieve continuedrevenue growth and shape the future of theworld’s communications. ZTE TECHNOLOGIES April 2011

VIP VoiceZTE Banks onUpmarket ExpansionMarch 2, 2011By Owen Fletcher, reporter of Wall Street JournalWei Zaisheng, ZTE Chief Financial OfficerCh i n a ’ s Z T E C o r p . h a sgrown fast over the pastd e c a d e s e l l i n g l o w - c o s ttelecommunications equipmentlargely to operators in China and otheremerging markets. Last year, the firmalso made waves in North Americaselling 14 models of handsets there,and became the world’s No. 4 phonesupplier by units.N o w t h e c o m p a n y, b a s e d i nS h e n z h e n , i s l o o k i n g t o m o v eupmarket and expand sales overseas.In particular, ZTE’s managementhas sights on North America, wherethe firm aims to broaden its deviceofferings with smartphones and tabletcomputers and to land higher-profilenetwork-gear deals.But the firm’s ambitious plansraise new challenges. “We thinkour revenue growth last year was16%--17%,” said ZTE Chief FinancialO ff i c e r We i Z a i s h e n g . “ I n t h eindustry, our growth was relativelyhigh…But there were a few situationslast year.”T h e c o m p a n y h a s r u n i n t odifficulties with governments in theU.S. and Europe over concerns aboutApril 2011ZTE TECHNOLOGIES

VIP VoiceIt’s more yourproducts and service thatdetermine your competitivestatus. Price is not acompetitive factor we arerelying on in the globalmarket.ties to the Chinese government and, in India over officialsecurity inspections for network equipment from China.Mr. Wei spoke to Owen Fletcher about challenges ofmanaging a growing global telecom business.WSJ: ZTE’s preliminary results said operating revenuelast year rose 17%. What drove the revenue growth?Mr. Wei: Maintaining growth in the Chinese marketactually meant our market share expanded. Overseas, theIndian government’s security-inspections incident haltedour market in India in the first half, but it was restored inthe second half. This had some impact on our overseasresults. There was also the European Union’s antidumpinginvestigation on certain wireless modems from China andthe U.S. government’s interference in cooperation withoperators. Without these situations, our growth may havebeen faster.WSJ: Have you directly communicated with the U.S.government on its political concerns about ZTE?Mr. Wei: As a company we can’t directly communicatewith a government. Our goal is to sell equipment; we don’thave any other thoughts. We hope the U.S. governmentcan be accepting of us. We believe our technology and ourservice abilities will win the recognition of the major U.S.operators. At least for Sprint last year, we should havehad the qualifications to become their key partner. The ZTE TECHNOLOGIES April 2011

government should promote a fair, equitable, normal andfree commercial environment, and it shouldn’t interfere inthis.WSJ: What measures are you taking in the U.S. to addressthe political issues and expand your business?Mr. Wei: Right now mainly we hope to provide equipmentfor local operators, and for instance terminals for the bigoperators. We are waiting for more opportunities.WSJ: ZTE is known as a low-cost producer. How will arising yuan-dollar exchange rate affect you?Mr. Wei: First, I don’t accept the view that our prices arelower than our competitors’. Telecom-equipment pricesshould be at the same level for everyone. It’s more yourproducts and service that determine your competitivestatus. Price is not a competitive factor we are relying onin the global market. The yuan’s appreciation will causeyour prices to rise. But more important is your status in themarket.WSJ: What types of overseas investments are youconsidering to help reduce foreign-exchange risk?Mr. Wei: As one measure in certain key countries we willbuild local factories. We hope to use the factories to extendthe local market. In Brazil, Ethiopia and Venezuela wehave mobile-phone factories.WSJ: Will you build handset factories in Europe?Mr. Wei: The timing isn’t confirmed yet. We certainlymust build them.WSJ: Does ZTE hope to sell more own-brand phones?Mr. Wei: We have a relatively open policy. We can useother brands or go dual-branded between ZTE and anoperator. Overseas we hope to build ZTE’s brand.WSJ: Which markets will you focus on first for ZTEbrandphones?Mr. Wei: High-end markets, like Europe and the U.S. Inthe U.S. we already have cooperation with the four bigcarriers on independently ZTE-branded terminals, mobilephones. We will increase the force of our investmenton smart terminals like smartphones. Another thing isadvancing from the middle and low end to the middle andhigh end.WSJ: Will you use Android on all smartphones andtablets?Mr. Wei: Android will have the leading role.WSJ: Will you develop your own operating system?Mr. Wei: We have no need to do that. Android has alreadybecome a very mainstream platform. It is competing withApple.April 2011ZTE TECHNOLOGIES

Tech ForumTransformation OrientedCore Network Development andEvolutionBy Liu JianyeLiu Jianye, chief architect of ZTECore Network ProductsThe transition from Stone Ageto Bronze Age gave birth tocivilized societies and greatlyliberated the productive forces in thosesocieties. This is often consideredthe most important technologicalrevolution in human history. Such arevolution is also happening in today’smobile communications as mobileservices move from voice to data. Thetelecom revolution is having a greatinfluence on operators and equipmentsuppliers, impacting the long-termsurvival and development of their corenetwork products.A s t h e m o b i l e I n t e r n e t e r aapproaches, operators are no longercore players in the service value chain.They are becoming pipe providersand the foundation of their existenceis being shaken. Both traditionalequipment suppliers and operators arenow confronted with unprecedenteddifficulties and challenges.Development Strategy for CoreNetworkSeizing opportunities and seekinga Blue Ocean strategy is the onlyoption for equipment suppliers andoperators. ZTE has stuck with theprinciple of “three integrations and twotransformations” in developing its corenetwork products and has achievedsignificant results.Three Integrations■ Multiaccess integrated and flat‘smart pipe’ solution■ Integrated voice and multimedia ZTE TECHNOLOGIES April 2011

To really satisfy an operator'sneeds, a smart pipe must conform tothe 4Cs of diamond qualitycontrol network■ U n i f i e d a n d i n t e g r a t e d d a t amanagementTwo transformations■ Transformation from closed telecomstructure to integrated telecom andIT architecture■ Transformation from productcentred to service centred, fromfunction oriented to user experienceorientedWi t h a t e r m i n a l - p i p e - c l o u da r c h i t e c t u r e , a c o r e n e t w o r kincorporates smart pipe layer andnetwork control layer, as shown inFigure 1. The smart pipe layer isthe core of a smart packet networkthat provides intelligent control overvarious wireline/wireless access andbearer layers. The network controllayer controls IMS, CS voice, andmultimedia services in an integratedway, and unifies user data management.More importantly, it is an open platformfor developing comprehensive networkcomputation and storage capabilities.In this way, the application layer canutilize information and capabilitiesto help operators provide Internetapplication services and platformsupport for enterprise cloud computing.In the transformation from servicecontrol to application capabilityprovision, the core network acts asnetwork middleware that abstractsinfrastructure resources, networkcapabilities, and basic functions forall service applications. As its serviceNetwork Control LayerOpen CapabilityPlatformCS-IMS ConvergedControlApplicationLayerSmart Pipe LayerBearer LayerOpen InformationPlatformUSPPZSP(ZTE Smart Pipe)Access LayerWireless AccessWireline AccessTerminalLayerFigure 1. Position of a core network.control function is weakened, thecore network is evolving into anopen platform that provides leasedcapabilities services.Building a “Diamond Grade” SmartPipeThe rapid growth of mobile Internethad generated great demand for smartpipes. Offering an experience beyonduser expectation is essential to the corecompetitiveness of pipe providers. Toreally satisfy an operator’s needs, asmart pipe must conform to the 4Cs ofdiamond quality:■ Carat weight: “Carat weight”bandwidth provides high bandwidthefficiency, flexible bandwidthexpansion, and meets the challengeof bandwidth explosion in themobile Internet era;■ C l a r i t y : C l e a n a n d v i s i b l ecommunication pipes give providersinsight into hot services and userbehaviours. They are the basis formaking operational decisions. Cleanpipes with antivirus function alsoprotect user security;■ Color: Extremely fast, colorful,seamless access experience isprovided to end users, and exclusiveconsulting services are provided toenterprise users;■ Cut: Low-value traffic is cut out toensure quality and perfect servicefor high-value traffic. “DiamondApril 2011ZTE TECHNOLOGIES

Tech Forumgrade” smart pipes are built tocreate maximum value.To fulfil the four Cs of diamondqualitysmart pipes, ZTE has rolled outZSP―a complete smart pipe solutionthat contains three sub-solutions:Optimized Operation and ManagementSolution (ZOOMs), Effective Routingand Offload Solution (ZEROs), andContent Optimizational IntelligentNetwork (zCOIN). These aim toimprove user experience at lower cost.■ ZOOMs transforms traditionaln a k e d p i p e s i n t o v i s i b l e ,manageable, and controllablecolourful pipes from the perspectiveof terminals, users, time, locations,services, and access modes. Thismaximizes pipe efficiency in agiven bandwidth.■ For long-term network developmentand smooth evolution, ZEROsadopts innovative technologies―GRP and MAB―for multiaccessbind capability and flat networks t r u c t u r e . T h i s a l l o w s l o w -cost traffic offload and expandsbandwidth without changingexisting network architecture.■ zCOIN adopts content storage,c o m p r e s s i o n , a g g r e g a t i o ntechnologies as well as unilateralTCP optimization and end-to-endflow control to improve mobileInternet user experience. To offera complete wireless applicationdelivery solution, optimizations aremade to address the last mile accessbottleneck. QoS-based contentdelivery is also implementedalong with Policy and ChargingControl (PCC). zCOIN changes thetraditional forward charging modeand builds an open pipe platformthat helps operators obtain morerevenue from the Internet.Building a CS-IMS ConvergedService Control NetworkDespite a decline in both mobileand fixed voice revenues, voice serviceis still an important percentage ofoperator revenue. Traditional mobilesoftswitch will continue to play animportant role in voice services.Currently, major IMS applications aredriven by the fixed VoIP market―wherestandard VoIP services are provided andClass 5 switches are replaced. As mobileoperators evolve towards full-serviceprovision and new wireless technologies(HSPA+, WiMAX, and LTE) are used,wireless VoIP and multimedia serviceshave become a focus of attention ofoperators.The two modes of voice servicedelivery need to coexist and evolveover the long term. Due to the agingand high TCO of existing mobilesoftswitch equipment, operators seekto adopt new-generation equipmentutilizing high integration and low-TCO IT technology for building theirnetworks. Because numerous IMSdevices are used, their interfaces arequite complicated. This results indifficult equipment maintenance andhigh operation costs. Therefore, it isimperative to adopt a highly-integratednew-generation platform that allowsfor full convergence of CS and IMS.ZTE has developed a Voice & Videoover Any-access solution (zVOA) thatcan help operators achieve sustainablenetwork development while enhancingcompetitive edge of existing networks.Using zVOA, the traditional CSvoice services and IMS services canbe operated in a unified manner, andvarious multimedia and voice servicesover broadband access can be expandedby leveraging the advantages of the CSnetwork. Based on ZTE’s advancedETCA hardware platform and TULIPmiddleware platform, zVOA is fullycompatible with all standard CS andIMS interfaces. It uses virtualizationand cloud computing technologiesto introduce intelligent ControllereXtensive (iCX) and integrativeMedia Gateway (iMG). iCX integratesfunctions of control plane networkelements such as CSCF, MGCF, MSC,MSS, MMTel, AGCF, mAGCF, andMRFC, while iMG integrates functionsof media plane network elementssuch as MGW, MRFP, and VIG. Byinheriting traditional CS functions andusing standard IMS implementation,zVOA provides VoIP and multimediaservices with carrier-grade QoS. iCXand iMG with unified software andhardware platforms support smoothupgrade from MSC and MGW tomAGCF, CSCF, MMTel, and MRFP.This helps operators with unifiedoperation and smooth evolution.ConclusionFacing network transformation,operators are seeking to develop smartpipes for their core networks. ZTEhas rolled out ZSP―a complete smartpipe solution that helps operatorsbuild low-cost, best-experiencediamond-grade smart pipes thatsupport sustainable development. Withthe growth of mobile Internet, thetransformation concept of platform +pipe will certainly be strengthened.This is the driving force for long-termdevelopment of core networks.CS and IMS will continue to bemajor contributors to service revenue inthe long run. Assisted by iCX intelligentcontroller and iMG integrative mediagateway, zVOA will help operatorsprovide quality application services toindividuals and enterprises, and rise tothe challenges of mobile Internet in thetelecom field. ZTE TECHNOLOGIES April 2011

Operation InsightAsia-Pacific FTTxBusiness ModelBy Chen ZongcongThe telecom industry escapedthe worst effects of the 2008global financial crisis and isnow experiencing robust growth. InAsia-Pacific, telecom investment hasgenerally become more diversified, butbroadband is still the central focus forinvestment in network construction.B r o a d b a n d c o n s u m p t i o n i sfragmenting, and demands for video,social networking, and location servicesare growing rapidly. Because usersrequire high-bandwidth access anytimeand anywhere, a broadband longtaileffect is taking shape. Changes intelecom consumption are acceleratingthe transformation of traditional ICTservices into a complex ecologicalsystem of services. Video services arethe most bandwidth-hungry services.The Asia-Pacific telecom sectorhas moved from being a fledglingcompetitor on the international stageto being a mature, all-out competitor.The position of operators in countriessuch as China, Malaysia, and Indonesiais diversifying. But although they aredeveloping into modern operators,they still retain vestiges of their roleas government agencies. Some ofthese operators have a semi-monopolyon technology, capital, managementexpertise, and telecom regulation.April 2011ZTE TECHNOLOGIES

Operation InsightMost Asia-Pacific operators areboosting bandwidth by shorteningthe length of copper cables andadopting GPON/EPON or even NG-PONtechnology.And this gives them advantages overcompetitors.Telecom operation models haveundergone major transformationworldwide, and this has been broughtabout by the development of broadbandservices. Asia-Pacific operators havechosen the following path for networkdevelopment:■ N e t w o r k t r a n s f o r m a t i o n :Building a manageable, controllablet r a n s m i s s i o n p i p e s o t h a ttransmission is capability adaptablerather than traffic transparent.■ Value extension: Leveragingadvantages in capital, technology,and management to extend value toboth the cloud (service) and terminal(home network) sides.FTTx Business ModelZTE cooperates closely with allmajor Asia-Pacific operators andunderstands broadband trends in theregion. The company has conceived anAsia-Pacific FTTx business model withthe following characteristics:Fast broadband connection tosupport multiplay servicesVideo has become a popularmultimedia service driven by thegrowth of HDTV and 3DTV. Sooperators in Asia-Pacific have a clearobjective of broadband development.In the short term, bandwidth capabilityneeds to reach 20Mbps, with a viewtowards 50Mbps in the mid-term and1Gbps in the long term. To reach thisgoal, existing copper networks needto be immediately reconstructed. Mostoperators in this region are boostingbandwidth by shortening the lengthof copper cables and adopting GPON/EPON or even NG-PON technology.3G traffic offload and fixed-mobileconvergence at the access layerUser information consumptionhabits are becoming more fragmented,so operators need to integrate thenetwork at the terminal and accesslayers to provide high-bandwidthaccess anytime, anywhere.■ 3G traffic offload: PON + WLANcovers homes and public places andprovides supplementary Internetaccess for mobile broadband users.This reduces data traffic pressureon 3G networks and improves thequality of broadband services.■ Mobile backhaul over GPON: PON isused at the access layer for accessingmobile base stations. This reducesbearer pressure on 3G networks andincreases PON utilization.A manageable and controllablenetworkChanging business models meangreater requirements on networks.These requirements include smoothe n d - t o - e n d s e r v i c e f l o w s , f a s tand flexible service configurationand provision, fast fault locationand diagnosis, and an end-to-endimplementation mechanism for networkalarms and testing. A manageable andcontrollable network enables equipmentplug-and-play, immediate serviceactivation, early alarms, and bandwidthspeed prediction. These reduce usercomplaints and enhance satisfaction.A low TCO and green networkBuilding green networks hasbecome central to the corporatesocial responsibility of Asia-Pacificoperators. Networks must save energy,and this can be achieved throughgood equipment design and networkoptimization. Broadband networksmust also allow for sustainable andsmooth evolution. In the future, TCOcan be reduced by adopting IPv6, cloudcomputing, and NG-PON technologies.Uni NGA SolutionZTE’s Uni NGA solution is tailormadefor operators in Asia-Pacific10ZTE TECHNOLOGIES April 2011

and meets network requirements ofAsia-Pacific business models. It isdesigned to help operators build highvaluecutting-edge broadband networksbased on a terminal-pipe-cloudarchitecture. The solution focuses onnetwork planning, operation, and greencommunications.■ H i g h - s p e e d b r o a d b a n dconnection: ZTE’s future-proofunified broadband access platformallows full-service access and fullscenariocoverage. It is designed todeliver bandwidth-intensive videoservices such as high definition TVand 3D TV. It is also designed toaccommodate bandwidth planningfor 20Mbps in the short term and50--100Mbps in the mid to longterm.■ Integrated platform: ZTE’sunified access platform addressesbandwidth bottleneck using xPONbasedmobile backhaul. It alsodiverts 3G traffic in hotspot areasthrough xPON+WLAN, effectivelymeeting the growth needs of mobileInternet.■ Easy O&M: ZTE focuses on themanageability and operability ofnetwork terminals, end-to-endautomatic service activation, andall-round service guarantee so thatbroadband networks can be easilyoperated and maintained.■ G r e e n c o m m u n i c a t i o n s :Working on the principle of “lessconsumption, lower cost, and betterlife,” ZTE helps operators buildlow-TCO networks with greentechnology and equipment solutions.Speeding up broadband connectionis a core goal for operators. ZTE’sUni NGA solution integrates mobilebackhaul and WLAN, allows forautomatic end-to-end service activationand easy O&M, and has energy-savingand emissions reduction features. Thishelps operators build low-TCO, highvaluebroadband networks.Success CasesMany operators in Asia-Pacific areusing the FTTx business model. Bybuilding smart pipes and extending thevalue of “cloud and terminals,” theyhave successfully transformed theirbroadband networks.Z T E h a s p r o v i d e d Te l e c o mMalaysia (TM) with a tailor-madeMSAN integrated access solution forunified access to both broadband andnarrowband services. This solutionincludes a unified network managementplatform that effectively manages allnetwork elements as well as a linedetection system that accurately locatesnetwork failures. These greatly boostTM’s efforts to build an integratedbroadband network.In Indonesia, ZTE has provided anumber of solutions that cater for thedifferent scenarios and requirementsof TELKOM’s GPON project. ZTEhas assisted TELKOM in building afull-service network that incorporatestraditional voice services and newmultimedia services with particularf o c u s o n t h e m o b i l e b a c k h a u lapplication. These help TELKOM raisecustomer loyalty and ARPU.In China, ZTE has provided ChinaTelecom with a complete FTTx solutionfollowing close cooperation on issuessuch as standards, interoperabilitytesting, and trial application. Thesolution is based on a unified OLTplatform for access to EPON, GPON,and 10G EPON and includes a series ofcustom-made ONU terminals (MDU/MTU/SBU/SFU/HGU). It also includesmeasures to cut TCO, save energy,and reduce emissions. These will helpChina Mobile build a manageable,maintainable, and high-bandwidthgreen FTTx network.April 2011ZTE TECHNOLOGIES11

SolutionsSmart Pipe Solutionin Mobile Internet EraBy Lu GuanghuiChallenges Faced by OperatorsIt is forecast that by 2012, thenumber of mobile Internet usersworldwide will exceed 2 billion,and revenue from global mobiledata services will surpass $120billion. This will account for morethan half of global telecom revenue.A variety of new smartphones willalso be introduced. Coda ResearchConsultancy predicts that 2.5 billionsmartphones will be sold worldwidefrom 2010 to 2015, and sales willcompound 24% annually by the end ofthis period. Network services will alsogrow rapidly. As of July 2010, sales ofApple’s iPhone had topped 50 million,more than 220,000 applicationswere available in the App Store, andover 5 billion applications had beendownloaded from App Store. Since thelaunch of iPhone, Apple has generatedover $100 million in revenue eachquarter from AT&T revenue sharing.Telecom infrastructure networkshave always been seen as a core assetof operators. Communication links, callduration, and broadband ports are allclosely connected with networks. In themobile Internet era, however, thingsare changing. The whole industry chainis shifting its attention to terminals andservices, while the value of operatornetworks keeps decreasing. Operatorsare tending to become pipe providers.At present, they cannot meet diverseuser needs with their limited services,although they still play a key role inthe traditional voice-dominated valuechain. As portable smart terminals havea strong ability to access the Internet, anew operation model of mobile Internetcan completely break the old industrialpattern. The IT industry represented byInternet is quickly penetrating into thetelecom market. Internet companiessuch as Google, Apple, Sina, Alibabaand Tencent provide unique contentand are service providers. They arethe leading players in the Internet era.Large amounts of free content pushedon the Internet is attractive to users,and this poses a challenge to traditionaltelecom operators―who are graduallylowering their position in the valuechain and become pipe providers.What can operators do to avoidbecoming pipe providers? They need tourgently adjust their operation modeland network architecture to adapt tohigh-speed growth of mobile Internet.The key is to build a smart pipefeaturing low cost, high bandwidth,manageability, differentiated services,and sustainable Return On Investment(ROI). To address this issue, ZTEhas put forward ZSP―an integratedsmart pipe solution designed for nextgeneration packet core networks.Operational Requirements forMobile InternetTo keep pace with Internet growth,mobile operators need to build an open,garden-like Internet eco-environmentin the way of Wal-Mart. As well asproviding fast and easy Internet access,they also offer differentiated services to12ZTE TECHNOLOGIES April 2011

content providers in diverse modes ofsupermarket management (retail store,franchise store, and supermarket’sspeciality store). By analyzing marketand user behaviour, they provideconsultation and advertising servicesfor content providers and one-stopVIP services for end users. In thisway, operators can complete theirmultichannel profit model. To achievethis goal, operators have to build anext-generation packet core networkoriented to mobile Internet. Thenetwork has the following features:Low costA low-cost network requires a nextgenerationmobile packet core networkthat provides:■ C o n v e r g e n c e : M u l t i a c c e s scapability accommodating 2G/3G/LTE, WiFi, and fixed access;■ Evolution: Supports smoothevolution from 2G/3G to LTE andLTE+;■ Little change: New capabilities(such as internet offload andmultiaccess bind capability) areadded without major change to thenetwork;■ High integration: Provides highbandwidth, low power consumption,and small footprint.Efficiency and intelligenceAn efficient and intelligent networkrequires optimized operation andmanagement of data services, so thenext-generation mobile packet corenetwork should provide:■ Service inspection: Differentiateservices based on deep inspectionand analysis of L3-L7 protocols.This is the basis for an efficient andintelligent network;■ Statistics and analysis: Analyzemobile data services and userbehaviour to determine networkusage and user preference;■ Service control: Help operatorsm a k e g o o d u s e o f n e t w o r kresources and promote healthybusiness growth;■ Content charging: Differentiateeach service with independentcharging modes to ensure every bittransmitted through the networkgenerates revenue for operators.Sustainable ROIA network with sustainable ROIrequires that the packet core networkbe incorporated into the Internetindustry chain and sustainable benefitsbe attained from Internet innovation.So the next-generation mobile packetcore network should support:■ Traffic flow optimization: Minimizetraffic flow at the transmission andapplication layers, and continuallycut down radio capacity expansioncosts;■ C o n t e n t a c c e l e r a t i o n a n dadaptation: Reduce access delay,and continually improve userexperience;■ Content aggregation and distribution:Create a backward charging model,and continually increase ROIthrough Internet growth.ZSP: ZTE Smart Pipe SolutionFor sustainable business growthin line with Internet growth, ZTE haslaunched ZSP―a complete smartpipe solution that can help operatorsbuild an open, garden-like mobileInternet eco-environment. The solutionconsists of three sub-solutions: ZTE’sEffective Routing and Offload Solution(ZEROs), ZTE’s Optimized Operationand Management Solution (ZOOMs),and ZTE’s Content OptimizationalIntelligent Network Solution (zCOIN).ZEROsZEROs focuses on building a lowcostpipe without any alteration tothe existing network. It helps reduceinvestment in network constructioncaused by rapid growth in mobileInternet data traffic. It effectivelyenhances bandwidth access to improveuser experience.ZOOMsZOOMs focuses on building avisible, manageable pipe. Throughaccurate inspection of user behaviourand traffic distribution and a flexiblepolicy making mechanism, ZOOMshelps operators deliver differentiatedservices. Through integrated statisticalanalysis and deep data mining, it helpsoperators further enhance their serviceinnovation capability.zCOINz C O I N p r o v i d e s c o n t e n toptimization and processing. Throughstorage, acceleration, compression,adaptation and aggregation of servicecontents, it can effectively improveuser experience and help operatorsobtain more revenue from the Internet.ZSP allows for open service access,effective content distribution, hotcontent storage, and shared serviceadaptation. It increases the speed ofaccess to self-operated services andmobile Internet applications, improvesuser service experience, and savesstorage and management costs. Thethree sub-solutions can be combinedor separated as required. They are thebasis for next-generation packet corenetworks, helping operators changetheir operation mode to accommodatemobile Internet and take lead in futuremobile internet development.April 2011ZTE TECHNOLOGIES13

SolutionszVOA:Empowering Converged Voiceand Multimedia ServicesBy Zhou YuxiangWith the rapid growth ofsmart phones and mobileb r o a d b a n d , m o b i l enetworks have entered an Internetera. Mobile operators are loweringtheir positions in the industrial chainwhile Internet operators are graduallymoving to higher positions. Almostall mobile operators adopt a two-core(CS+IMS) architecture for their corenetworks. Mobile softswitch is usedto provide voice, SMS, and USSDservices for 2G/3G terminals, andIMS is used to deliver multimediaservices to 3.5G, LTE, and WiFibroadband terminals. As defined in3GPP standards, CS will evolve intoan access network of IMS, and IMSwill control both voice and multimediaservices.Internet operators such as Googleand Tencent have advantages overm o b i l e o p e r a t o r s . T h e y a d o p tall-IP access and a single pointo f c o n f i g u r a t i o n f o r u n i v e r s a lreachability. With service pipesprovided by telecom operators, theycan deploy services faster and at lowercost. Moreover, Internet operators cancontrol terminal and service softwareby themselves, independent of specificterminals. This ensures continuousand consistent service experience forusers.However, mobile operators haveunique advantages in terms of phonenumber and network resources. Theyhave MSISDN and IMSI numberresources. A mobile subscriberidentified by a unique MSISDNand IMSI number can have globalroaming and communicate anywhereand at any time. Internet operators,however, have closed most networksthat are incapable of interoperability.14ZTE TECHNOLOGIES April 2011

makes network convergence difficultand complicated. Although 3GPPhas worked out IMS CentralizedServices (ICS), which allows CS toaccess IMS, the cost of deployingthis network is too high because ofoverly complicated architecture and anoverextended control chain.There are two difficulties in runningCS and IMS networks simultaneously:(1) CS service is a short to mediumterm cash cow for mobile operators,and this kind of revenue will declinein the long term. VoIP and SocialNetworking Service (SNS) networkswill continue to absorb voice traffic,which worsens the competitiveenvironment for CS.(2) Although IMS delivers multimediaservices and opens up telecomnetwork capabilities, evolvingexisting networks is difficult becauseof overly complicated architecture.IMS fails to beat SNS in creatingnew cashflow.Because evolving mobile networksfrom 2G/3G to 4G is a long process,CS and IMS networks will coexist fora long time. A converged CS and IMScore is needed to reduce both CAPEXand OPEX.With ten years experience inmobile softswitch and IMS R&D,ZTE has put forward a Voice & Videoover Any-Access (zVOA) solutionfor converging CS and IMS. Inthis solution, voice and multimedianetworks are controlled in a unifiedway through one set of equipment.This provides services for bothfeatured and smart terminals, as shownin Figure 1.z V O A f u l l y c o m p l i e s w i t hstandard interfaces for CS and IMSelements, satisfying user demands formultiaccess and service continuity. Itemploys state-of-the- art virtualizationand cloud computing technologiesUDCASSCP BOSSiCX (intelligent Controller eXtensive)Mobile operators also have multipleaccess networks that support 2G, 3G,4G, WiFi and LAN access modes.Changes in user location and servicecapability can be perceived in realtime. These help mobile operatorsdeliver appropriate services to users.At present, mobile operatorsemploy different control networksfor different access modes. Mobilesoftswitch is deployed for basic voiceand SMS over 2G and 3G networks,and IMS is deployed for multimediaservices over HSPA+, EV-DO, LTEand PON broadband networks. ThisCSCSMSCS/eCSCF PSS MGCF MRFC AGCF ......ICS in One BoxiMG (integrative Media Gateway)MGWIM-MGW MRFP VIG AG BGFLTE GSM/UMTS/CDMA Wi-Fi xDSL PONFigure 1. Schematic diagram of zVOA.IMSIMSApril 2011ZTE TECHNOLOGIES15

Solutionsbetween different access networksfor use on ZTE’s advanced ETCAh a r d w a r e p l a t f o r m a n d T U L I Psoftware middleware. It also featuresRAN/GERANCS&IMSintelligent Controller eXtensive (iCX)iCXA/luand integrative Media Gateway (iMG)AiiMGproducts. iCX integrates standardPSTN/PLMNmobile and fixed softswitches as wellas IMS call control elements, whileSVC,DSGiiMG incorporates media functionswith integrated voice, video, and otherHSScontent types. zVOA is designed forS11SGithe migration of voice traffic fromeNodeBMME S1-Ulegacy phones to smart phones, greatlyS1-MMESAE-GWInternetsimplifying IMS deployment. IMSEPConly needs two devices―iCX andiMG―to deliver voice and multimediaservices as simply as CS.Figure 2. VoLTE demo using zVOA.ZTE’s ETCA is an enhancedplatform based on ATCA standards. and TULIP can share hardware16 ZTE TECHNOLOGIES April 2011ATCA has a computing-centredarchitecture with weak switchingand storage capabilities. To enhanceswitching, storage, and interfacecapabilities, ETCA inserts blades inthe front and switches, storage, andinterfaces in the back. Therefore,the ETCA platform implements bothcontrol and media functions of CS andIMS elements.ZTE’s TULIP is system platforms o f t w a r e b a s e d o n a d v a n c e dmiddleware technology. MultipleTULIP-based network elements areintegrated in one blade through the“platform + service” components. Aunified platform process is responsiblefor the platform part that includessystem resource management, systemcontrol, lower-layer signaling process,OAM, and data configuration and canbe shared by all network elements.An independent service process isresponsible for the service part of eachnetwork element. Communicationbetween network elements is changedinto IPC between service processes.iCX and iMG based on ETCAin both the softswitch and IMSdomains. Hardware of the ETCAplatform―including CPU, memory,and interfaces―forms a resourcepool that can be shared by CS andIMS. Regardless of whether voicetraffic occurs in the CS domain orwill migrate to the IMS domain,system processing capability can beutilized. This helps minimize networkadjustments and saves costs.zVOA converges equipment andservices of CS and IMS elements.It provides multiaccess modes suchas 2G, 3G, 4G, WiFi, and PON.Whichever terminals are used andaccess modes are adopted, all systemservices are handled by iCX andiMG. This makes it easy to realizeConverged One Number service and toenable user roaming between differentaccess networks and terminals.iCX also provides a ServiceCentralization and Continuity (SCC)function, including Dual RadioVoice Call Continuity (DRVCC) andSingle Radio Voice Call Continuity(SRVCC). When services are switchedor terminals, signaling proceduresare greatly simplified, similar toh a n d o v e r b e t w e e n 2 G a n d 3 Gnetworks. Moreover, iCX providescontrol functions such as MSCServer,Ehhanced MSC, CSCF, and VCC AS.iMG integrates MGW, IM-MGW,and MRFP media functions. iCX andiMG work together to implementVoice over LTE (VoLTE) and SRVCC.When voice calls are switched fromIMS to CS, CS and IMS elementsinteract internally, and the signalingprocedures seen from outside aresimilar to handover proceduresbetween 2G and 3G systems.zVOA will evolve to accommodateSocial Networking Service (SNS)n e t w o r k s , p r o v i d i n g a b u n d a n tcommunication capabilities forterminals at different access networks.Mobile networks will be built intostrong SNS networks that offer usersa perfect communication experience.ZTE is poised to help operatorsenhance their competitive edge in themobile Internet era.Voice Continuity

MAB:Building Low-CostHigh-Speed Mobile BroadbandBy Zhao YouchunData Services ChallengesThe popularity of 3G terminals andwidespread application of mobileInternet has brought about anupsurge in 3G network data. Operators arenow seeing a ten-fold or even hundredfoldincrease in their data traffic. Becauserevenues are not increasing in line withtraffic growth, operators worldwide aredeploying WLANs to provide high-qualitydata services at low cost.In terms of user density, data bandwidth,and construction cost, WLAN has provento be advantageous over wireless basestations for hotspot coverage. In hotspotareas covered by WLAN, users have anaverage bandwidth of 1Mbps. The cost perbit for WLAN is far less than that of 3Gwireless networks using indoor distributedRRUs or repeaters. According to researchTable 1. Advantages of WLAN for hotspotcoverage.WiFi 802.11a 802.11b 802.11g 802.11nCoverage 50~200m 50~200m 50~200m 50~200mRate 54Mbps 10Mbps 54Mbps 300MbpsFrequencyBandFrequencyBand5GHz 2.4GHz 2.4GHz 2.4/5GHzWLAN EVDO HSPA TDOpen BandLimitedBandLimitedBandLimitedBandSecurity WAPI CHAP AKA AKACoverage 50~200m

Solutionsareas, meeting ordinary users’ needsfirm Informa, a large proportion of data18 ZTE TECHNOLOGIES April 2011traffic is generated indoors. Therefore,WLAN has become an effectivesolution to the upsurge in data trafficon 3G networks.for data services;■ GPRS is a supplement that providesdata access services for users insuburban and rural areas.To meet explosive growth in dataservices, WLAN Access Points (APs)will be widely deployed at airports,chain restaurants, office buildings, andshopping centers. Large-scale WLANsdeployed in hotspots can supplementexisting 3G networks and LTEnetworks yet to be deployed. Thesenetworks coexist and complement eachother to meet various requirements fordata services, as illustrated in Figure 1.With enhanced software, terminalscan access several available wirelessnetworks, and this provides userswith high-aggregate bandwidthsand improved service experience. Acomplete data operation mode can beestablished for ubiquitous connectivity.Through multinetwork convergence,more users will be attracted to mobiledata services.■ WLAN encourages and attractsusers to extensively access dataservices in urban data hotspots. Thishelps cultivate user loyalty;■ LTE provides high-speed dataservices in major urban data serviceareas to retain users;■ TD provides low and mediumspeeddata services in metropolitanMultinetwork Convergence forMobile Data StrategyContinuous Internet connectionhas become a major feature of mobileInternet applications. These serviceshave the following features:■ Bursts of interactive data traffic:Interactive data traffic occurs inshort bursts (like MSN and QQ).When not activated, a service isdormant.■ Frequent occupation of wirelessresources: When a service isdormant, a keep-alive message issent. Air links are activated forallocating wireless channels. Thisresults in overloaded wirelesssignaling and affects voice quality.■ High requirements for sessioncontinuity: A service needs tomaintain session continuity whenusers are on the move and theirinteractive messages occur in shortbursts.These features cause continuouslyconnected online services to consume alarge amount of 3G wireless resources.In addition, services with large trafficsuch as online videos lead to severeGSM/EDGE: Voice /Low-speed Data ServicesTD/HSDPA: Voice/Video Phone/Medium- and Low-speed Data ServicesLTE: Medium- and High-speed Data ServicesWLAN: Static HighspeedData ServicesWholeOrdinaryNetworkCoverage AreasMajor Urban AreasHotspot sCoverageMultimode TerminalFigure 1. Multinetwork convergence for data services.broadcast storms. Users often havea poor experience with data servicesbecause network quality cannot beguaranteed. Therefore, multiplenetworks need to be converged to solvedata storm issues and improve userexperience.Multinetwork binding is a keymobile data strategy. An effectiveway for operators to expand thenumber of data subscribers is toenhance terminal capabilities, connectmultiple data networks, aggregatewireless bandwidths, and offer higherbandwidth. The ability of networks tocontrol terminals needs to be furtheroptimized and enhanced so thatdata load can be shared by multiplenetworks without user experience beingaffected.In the future mobile Internet,terminals supporting multinetworkconvergence will determine the sizeof an operator ’s data subscriberbase. Terminals decide networks. Tosignificantly expand the number ofdata subscribers, operators urgentlyneed to change their packet networksto accommodate their mobile datastrategy.Terminal requirementsTo provide users with sessioncontinuity during seamless mobility,and to meet the requirements ofcontinuous Internet connection,terminals must support unifiedauthentication and must have accessto 3G packet core networks. They canalso support access to multiple wirelessnetworks and establish one sessionbinding. This satisfies the needs oflarge-traffic applications.Packet core network requirementsPacket core networks must befurther enhanced to provide terminals

with bandwidth binding and a unifiedIP session. Depending on service typeand wireless network load, packet corenetworks can also dynamically guidethe loads of multiple data streams onterminals so that they are shared acrossmultiple wireless networks.MAB Expands Data Subscriber BaseZTE has developed MultipleAccess Binding (MAB) solution formultinetwork convergence and sessionbinding, as illustrated in Figure 2. Thesolution has:■ Bandwidth aggregation by oneIP session: Terminals can locatemultiple wireless networks andinitiate access simultaneously.Bandwidths of multiple wirelessnetworks are aggregated by oneIP session. Users experienceexponentially increased bandwidthand faster, smoother service accessand data downloading withoutperceiving access modes andnetworks.■ Application-based routing:Terminals can select properwireless networks for routingdepending on application features―such as bandwidth and accessrequirements―activated by users.Continuously connected servicesUSB Dongle+ Laptop WiFiSuper TunnelFigure 2. MAB architecture.GPRS/UMTSHSPATDD/FDD-LTEAPAPWLANsuch as MSN and QQ that occupya large amount of radio signalingresource can be routed throughWLAN. P2P downloading servicescan also be routed through WLAN.Data services such as SocialNetworking Service (SNS) andonline games that have higher realtimerequirements can be routedthrough a TD network. For aninteractive video application suchas telepresence, voice can be routedthrough a TD network with QoSguarantee, and videos can be routedthrough a WLAN network withhigh bandwidth.■ S e s s i o n c o n t i n u i t y d u r i n gseamless mobility: Dependingon user location, a terminalcan intelligently detect WLANavailability and can do so with lowpower consumption. When a usermoves out of a WLAN hotspot,the online service is automaticallymigrated to TD/HSPA or LTEnetworks for session continuity.A good user experience canbe maintained. When movingback into a WLAN hotspot, auser can automatically accessWLAN. Designated services areautomatically migrated to WLANaccording to the operator’s dynamicSGSN/MMEUnified EPC CoreServing GWPDG/ePDGAAA/HLR/HSSOCSUBASPCRF/SPRGGSN/PDN GWOCSOn-line VideoInstantMessageIMS AppOn-lineGameVideoConferenceMMTeltraffic strategy, and data load isevenly distributed across multiplewireless networks.■ Dynamic network resourceallocation: Depending on thedistribution of access users, a corenetwork dynamically analyzes thedata loads of wireless networks,checks data hotspots (where theremay be heavy data loads), andadjusts the routing of dynamicapplication services. Terminalsare notified in real-time to adjustrouting strategy of their dataservices so that load is balancedacross multiple wireless accessnetworks.■ Network control over data servicerouting: After accessing multiplewireless networks, terminals canobtain information from corenetworks about real-time routingstrategy for all application serviceflows. Therefore, when data servicesare activated, the correspondingapplications are routed through thedesignated access network. In thisway, operators can enhance theircontrol over terminal behaviors,divert and distribute data flows,and optimize utilization of networkresources.By enhancing terminal capability andfollowing 3GPP I-WLAN standards,MAB integrates WLAN, TD, and LTEnetworks into one mobile broadbandnetwork. Operators can enable theircore networks to interact directly withuser terminals for dynamic routing.This means that networks are closelycorrelated to users, and networks canbetter control user behaviors. MABhelps operators provide quality, low-costdata services by introducing synergybetween their access technologiesand by supporting access bindings ofWLAN, TD, and LTE.April 2011ZTE TECHNOLOGIES19

SolutionsNew Choices for Network O&MBy Zhou YongkangFo r l o n g - t e r m b u s i n e s sdevelopment, an enterprise musthave a plan to deal with differentcompetitive environments. This plan isa strategy for the enterprise. Accordingto Jack Welch, CEO of GeneralElectric, strategy means making clearcutchoices about how to compete.Most telecom operators face thesame problems as other enterprises.They must make strategic decisions atdifferent stages and different levels;that is, make choices about industryvalue chain, target customers, operationmodels, and opportunities implied bydifferent business models.To develop new services andattract more subscribers, operatorsare gradually transforming into fullserviceoperators. This transition isitself a choice. Because full-serviceoperation leads to more dedicatedbearer networks, core networks, andaccess networks, O&M has becomeincreasingly complicated. So how dooperators choose their network O&Mmodes?Choices for Network O&MThere are few choices for networkO&M when a single service typeis being offered and the network issimple in structure. But where multipleservices are offered and networkarchitecture is complicated, differentnetwork O&M modes come withdifferent efficiencies and costs. Thisdirectly impacts an operator’s profitand even their competiveness withinthe industry.The following network O&M modesare currently available:■ Independent O&MWhen single-service operation istransformed into full-service operation,independent O&M is a natural and easychoice. However, dedicated networksare physically and logically separateand are often not effectively integrated.Many independent O&M systemsmay have been adopted that cannot beshared. This results in high O&M costs.■ Managed ServiceManaged Service is another O&Mchoice that is usually offered by a thirdparty. To lower O&M costs, the thirdparty manages networks of different20ZTE TECHNOLOGIES April 2011

operators. So the O&M center may befar away, and perhaps only a limitednumber of networks can be managed.■ Centralized O&MFor multiple dedicated networks,centralized O&M may be adopted.Different Element ManagementSystems (EMSs) can be integrated forunified management through unifiedinterfaces. Centralized O&M has theadvantages of high efficiency and lowcost.Unified Network O&MTo solve the problem of managingmultiple dedicated networks andto reduce OPEX, ZTE developedNetNumen U31―a unified networkmanagement solution.NetNumen U31 is a scalablecarrier-class network managementsolution that can manage the wholenetwork including access, bearer, core,and service layers in a centralized way.It helps operators achieve high O&Mefficiency with lower TCO, and hasbecome their preferred choice.For seamless interconnection withOSS, NetNumen U31 supports avariety of northbound interfaces such asCORBA, SNMP, FTP, SOAP and CLI.It also provides configuration, alarm,and performance data for building acomplete, flexible BSS/OSS. Its usefulfunctionalities and tools help operatorsout of O&M trouble.■ Data check: NetNumen U31performs a data consistency checkthat lightens the workload ofO&M staff. It also performs healthcheckup and intelligent inspectionof all network devices to reduceO&M costs.■ High security: NetNumen U31provides complete access authoritycontrol and detailed log records. Ahighly secure networking solutionValue-added ServicesCRBT WAR SMSC & MMSC VMSUnified Core NetworkPSConverged TransmissionNetworkSwitch/Router/CEVarious Access NetworksGSM/TD/UMTS/LTEFigure 1. Position of NetNumen U31 in the network.prevents malicious attacks. Databackup and disaster tolerancesupports remote disaster recovery toguarantee high data security of thenetwork.■ I n t e l l i g e n t n e t w o r k i n g :N e t N u m e n U 3 1 s u p p o r t sthree access modes: GUI, WEB,and MML. These are used tomeet different scenarios, userbehaviors, network requirements,and bandwidth restrictions. Ahighly reliable security controlmechanism allows users to accessthe network management systemanywhere and control the networkremotely.NetNumen U31 also provideseffective tools to boost O&M serviceefficiency. Measurement Report (MR)replaces Drive Test (DT) for locatingproblems in coverage, interference,and adjacent cells quickly andaccurately. This helps lower OPEXand boost working efficiency. A userbasedend-to-end protocol trace toolis used to support multiple NetworkElements (NEs), multiple signalingtrace modes, and multiple presencemodes. This helps speed up complaintCSDWM/OTNxDSL/xPON/LANIMSSDH/MSTP/PTNCDMA/EV-DOWiMAX/WiFiBOSS MMSNetNumen TM U31GUI ClientWEB ClientMML Clientresponse time. Quick fault locating,network quality optimization, userbehavior analysis, and industry trendforecast also improve network quality,increase business revenue, and enhancecustomer satisfaction.NetNumen U31 supports flexiblecentralized or distributed networkingmodes to accommodate differentoperation scenarios. For a small-scalenetwork, a unified network managementsystem integrating multiple EMSscan be used to lower O&M costs. Fora large-scale network, operators canchoose to combine logically relevantEMSs or separate some managementfunctions for the purpose of loadsharing. In this way, users can manageall NEs through a single client.ConclusionA complete operation supportsystem helps enhance an operator’scompetitiveness. With the distinctadvantages of high O&M efficiency,low O&M costs, and modular structurefor adapting to changes in networkevolution, ZTE’s NetNumen U31 isideal for building a competitive O&Msystem.April 2011ZTE TECHNOLOGIES21

Success StoriesTelefonica Leads Broadband Growthin Latin AmericaBy Su HonghaiFounded in 1924, Telefonicais a leading MultinationalTelecom Operator (MTO) withheadquarters in Spain. Its activitiesare mainly centred on fixed andmobile telephony with broadbandas a key tool for the development ofboth. Telefonica has a presence in 25countries and a global customer baseof 280 million. Its growth strategyis focused on markets in which italready has a strong foothold: Spain,Europe, and Latin America. Withdistinct broadband advantages,Telefonica has long dominated thebroadband market in Latin Americaand has become the biggest telecomplayer in the region.A s b r o a d b a n d t e c h n o l o g i e sdevelop rapidly and new services areintroduced, people in Latin Americaare enjoying the convenience offast Internet. Broadband Internet isbecoming a necessity in their lives. Inrecent years, the number of broadbandsubscribers has grown by doubledigitsin countries such as Brazil,Argentina, Peru, Chile, and Columbia.This represents a great opportunityfor telecom operators in the region.The top 3 Latin American MTOsTelefonica, AM, and TIM as well aslocal operators OI, UNE, TA, ETB,and ANTEL are eager to grab themaximum share of profits from thelucrative development opportunity.Facing aggressive challenges fromother MTOs and competitive pressurefrom local operators supported by22ZTE TECHNOLOGIES April 2011

government, Telefonica must seizethe opportunity for better growth.It needs to deploy more CustomerPremises Equipment (CPE) forfast service expansion, adopt morecompetitive broadband productsand solutions to lower CAPEX andOPEX, offer more service options andhigher bandwidth to attract end users,and provide greener products to meetthe energy saving requirements.In 2010, Telefonica planned topurchase 2.5 million CPE units for itsbranch offices in Brazil, Argentina,Columbia, Peru and Chile. Differentcountries have different requirements,a n d t h e s e p r o d u c t s n e e d t o b ecustomized to meet diverse needs.Complex customization, stringentequipment testing, and large scaleequipment purchases over a shortperiod was a big challenge forTelefonica.After many technical discussionsand field tests, ZTE was chosen asTelefonica’s major CPE supplier. Anexpert team was quickly establishedthat was responsible for analysingbroadband business models andp r o v i d i n g p r o t o t y p e t e s t s a n dcustomized versions. Telefonicastipulated tens of customizationrequirements for home gateways,covering software and packingm a t e r i a l . Z T E d e v e l o p e d C P Eproducts based on a unified platformthat featured modular functionalityand easy code transplanting. Thesef e a t u r e s g r e a t l y s h o r t e n e d t h eproduct customization cycle, reduceddevelopment cost, and ensured fastproduct delivery.I n l a b o r a t o r y t e s t i n g w i t hTelefonica, equipment suppliers hadto understand Telefonica’s stricttesting procedures and overcomecommunication barriers caused bydifferent time zones and significantcultural differences. However,Telefonica had full confidence in ZTEfor its professional and dedicatedtesting engineers capable of providing24-hour remote technical supportand tackling test problems fast andaccurately. In cases of test failure,fault information would be fed assoon as possible to ZTE’s R&D teamfor troubleshooting. This ensuredsmooth lab testing.To meet broadband user demands inLatin America and global broadbanddevelopment trends, Telefonica hasadopted a variety of custom-madeCPE products supplied by ZTE. Theseinclude wired ADSL modem (ZXDSL831), wireless ADSL modem (ZXV10W300 and ZXV10 H108), wirelessVDSL modem (ZXDSL 931), Ethernetuplink modem (ZXV10 H118N), andcompact Q-type modem (ZXV10W300S and ZXDSL 831II). Thelatest broadband technologies TR069,802.11n, UPNP, and DLNA have alsobeen used.Benefiting from ZTE’s efficientproduct customization and fastdelivery capability, Telefonicasucceeded in quickly expanding itsbroadband services throughout LatinAmerica. After commercialization,the CPE products proved theiroutstanding performance, highn e t w o r k s e c u r i t y , a n d g o o dcompatibility. The complete productp o r t f o l i o a d d r e s s e s d i f f e r e n tnetworking scenarios. Abundantuser interfaces meet various servicerequirements, and highly integratedPCB and software designs are ecofriendly.Telefonica was satisfied withZTE and chose it as one of its mostimportant strategic partners.By cooperating with equipmentsuppliers, Telefonica fulfilled itstarget of deploying 2.5 million CPEunits throughout Latin America.ZTE supplied 1.3 million CPE unitsto Telefonica, capturing more than50% market share. Telefonica willstrengthen its cooperation with ZTE.This will underpin Telefonica’sbusiness expansion throughout LatinAmerica and increase its profitabilityin the region. In partnering withZTE, Telefonica will continue to leadbroadband growth in Latin America.April 2011ZTE TECHNOLOGIES23

Success StoriesSSTL Sets a Benchmark forNetwork O&M in IndiaBy Jiang ShifengSistema Shyam TeleServices(SSTL) is a joint venturebetween the Russian company,Sistema, and the Shyam Group of India.Sistema is the majority shareholderin the joint venture. SSTL has thespectrum to provide mobile telephonyin all 22 circles within India.In 2008, ZTE was chosen as SSTL’snetwork equipment supplier and wascharged with the responsibility ofoperating SSTL’s networks in 16 circleswithin India. With a population of52.85 million, Karnataka is one of themost populous circles in the country.Its capital, Bangalore, is so-called the“Silicon Valley” of India. Karnatakaaccounts for the largest portion ofSistema’s investment in India and isthe benchmark for SSTL’s networkoperation, user expansion, marketshare, and Return On Investment (ROI)in the country.K a r n a t a k a ― a k e y a r e a f o rdeveloping telecom business insouthern India―has experienced fastuser expansion and rapid increase inequipment use. However, because oflimited investment, the speed of itstelecom equipment expansion hasnot kept pace with market growthand the increased number of users. Anewcomer to the market, SSTL is undergreat pressure to compete. It needs torapidly gain market share, attract moresubscribers, and implement efficientoperation and maintenance at low cost.Network Operation Efficiency andSecurityFor high stability, high security, andhigh availability in its networks, SSTLadopted a network security evaluationsolution supplied by ZTE. Thisguarantees secure, efficient networkoperation in four ways:■ Spare parts management: ZTEhas built circle-level (state-level)and cluster-level (group-level)spare parts storehouses in additionto those already located at its Indian24ZTE TECHNOLOGIES April 2011

With hard work, professionalism, quick response, and wellplannedwork, ZTE’s MS Karnataka team has managed to achieveexcellent results. After launching the network, 100% network availabilityhas been achieved despite increased traffic load and monsoons hittingthe network during July 2010.––Mr. Shivakumar, CTO of SSTL’s Karnataka circleheadquarters and regional offices.This multilevel spare parts responsesystem ensures fast changeover orrecovery of faulty cards.■ Expert resources: Experts areavailable for MPLS reconstructiona n d t r a n s m i s s i o n r e s o u r c eo p t i m i z a t i o n . T h i r d - p a r t yequipment vendors can be sent toadjust and optimize transmissionlinks and ensure high availability ofactive/standby equipment and links.■ Virus detection and prevention:A complete antivirus solution isprovided to prevent, detect, andremove network viruses. ZTE’santivirus was tested and proveneffective and has been widelydeployed across all SSTL networks.■ Network security evaluationmechanism: Network KPIs areanalyzed and evaluated weekly,monthly, and quarterly. For capacityand security issues, networkoptimization and improvementsolutions are also provided to protectagainst potential risks.Three-Level Response MechanismKarnataka is SSTL’s pilot area fornetwork O&M and service expansion.This circle is strategically importantfor SSTL’s business expansion acrossIndia. To ensure fast response tonetwork failures, ZTE established athree-level response mechanism: O&Mat the site, O&M support at the CircleOperation Center (COC), and expertsupport at the Local Customer SupportCenter (LCSC). A team of 35 technicalexperts from ZTE are dedicated toManaged Service (MS) in Karnataka.This rapid response mechanism helpsSSTL reduce its network failurerecovery time and continually improveuser satisfaction.High Network AvailabilityFast market development but slowequipment expansion is a big problemfor SSTL. Taking into account networkconditions and equipment features,SSTL adopted Uni-POS―ZTE’sprofessional network optimizationtool―to optimize key networkindicators and allocate networkresources. After nearly a year ofcontinual optimization, SSTL achievedtheir network KPI targets and enhancedcustomer satisfaction. SSTL specificallyanalyzes customer satisfaction and ismeeting increasing user requirementswith 100% network availability.In network tests conducted by theTelecom Regulatory Authority ofIndia (TRAI) in 2009, SSTL rankedfirst in network KPI. High-qualitynetworks significantly increased SSTL’sconfidence in expanding its market anduser base. Today, its subscriber baseis 433,125 and its busy hour traffic is17,363.28 ERL. With its professionalMS team, ZTE has helped STTL securea share of the Indian telecom market andachieve win-win results.April 2011ZTE TECHNOLOGIES25

Third EyeInsights on 2010 MarketPerformanceFebruary 2011, selected from the global-growth consulting firm Frost & SullivanThe global market and domesticmarket in China both haveexperienced a deteriorationi n 2 0 1 0 , w i t h a d e c l i n a t i o n o ftelecom investment on each marketby 3% and 14% respectively, incontrast with 2009. However, evenconfronting tough times in the telecommarkets, ZTE has made a remarkableachievement in 2010, with contractsales up to 100 billion RMB andgrowth rate of 26%. This enables ZTEto be the fastest growing vendor in theglobal telecom sector.According to the survey by Frost& Sullivan, ZTE has the highestCompound Annual Growth Rate(CAGR) among the top 5 vendors(Ericsson, Nokia, Huawei, Alcatellucent)in the global market, with28.01% CAGR from the year 2008 to2010 and 37.48% among 2006-2010.ZTE has achieved 29% growth ofits contract sales in overseas markets,especially in European and NorthAmerican market, which is creditableto its success in 2010. More and moretier 1 players such as France Telecom,América Móvil, MTN and Softbankembark on cooperation with ZTE, andappreciate its excellent delivery. ZTE’sterminal products, Blade, Racer, Light,were out of stock in the Europe marketfor the first time, which witnessedZTE living up to its reputation.Despite this, the 3G investment inChina market was facing a slowdowncompared with the peak time in 2009,falling from 160 billion RMB in 2009to 122 billion RMB in 2010. However,tri-networks integration boosted theinvestment in fixed-network whichhoisted ZTE to achieve 22% growth inthe domestic market.Stabilization in its market shareof wireless products and ambitiontowards the 3G terminal market willconsolidate ZTE’s market position andguarantee its steady and sustainablegrowth in the future.26ZTE TECHNOLOGIES April 2011

News BriefZTE AnnouncesC-RAN SolutionExpected to lower TCO ofwireless networks by 40%15 February 2011, Shenzhen― ZTE launched today at MobileWorld Congress 2011 a nextgeneration Cloud of Radio AccessN e t w o r k ( C - R A N ) w i r e l e s snetworking solution, which isfuture-proof for the next 10 years.The new C-RAN solution, whichwas firstly introduced by CMCC,will dramatically lower bothCAPEX and OPEX for operatorsand greatly reduce powerconsumption throughits new wirelessaccessnetworka r c h i t e c t u r e .The solutioni s e x p e c t e dt o l o w e r t h eTCO of wirelessnetworks by 40%.ZTE believesthat while creatingnew wireless broadbandservices for customers, it is apriority to also lower the perbitdata costs. Compared toequipment costs, such as chipsand single boards, the percentageof costs associated with stationsites, computer room and day-todayoperation is often over 60%.Therefore, delivering innovation atthe wireless architectural level ismore impactful, as operators needa new generation of the C-RANsolutions.ZTE Showcases Industry’s First MAB Live Demo17 February 2011,S h e n z h e n ― Z T Et o d a y a n n o u n c e dit has successfullyd e m o n s t r a t e d t h eIndustry’s first everM u l t i p l e A c c e s sB i n d i n g S o l u t i o n(MAB) in a live demoa t M o b i l e Wo r l dC o n g r e s s 2 0 11 i nBarcelona.Branded ALL-JOIN, the MABsolution signifies how a UE can bindmultiple RATs simultaneously. The livedemo was witnessed by more than 35 topoperators from around the world, inthe VIP room of ZTE’s boothat MWC. The Uni Coreteam successfullyd e m o n s t r a t e dbinding of LTE &WiFi on a singleUE through unifieda u t h e n t i c a t i o n17 February 2011, Shenzhen ―ZTE today demonstrated video call,video streaming, FTP services based onLTE-A Coordinated Multipoint(CoMP)technology at Mobile World Congress2011 in Barcelona, Spain, which makesZTE the first and exclusive telecomsvendor to demonstrate LTE-A CoMPbasedservices in the world.During the demonstration, thesystem achieved downstream peakspeed of over 1Gbps, enablingparticipants to become the firstt o e x p e r i e n c e t h e b l a z i n g f a s tby ZTE USPP (UDC). It then boundmultiple access technologies usingIntegrated Serving Gateway (ISGW) builton the advanced service router platform.During the live demo, operatorsshowed great interest whilst observinga streamed video session establishedover LTE and FTP Download (P2Ptraffic case) over WiFi, carried out atthe same time. The operators witnessed“the super tunnel” creation in the ISGWand significant bandwidth boost wasrecorded.ZTE Exclusively Demonstrated LTE-ACoMP-based Servicesspeeds offered by 4G wirelesscommunications technologies. ZTEalso unveiled plans to introducecommercial LTE-A products in 2012,to meet the growing need for highspeeddata communication.ZTE’s LTE-A CoMP prototypei n c o r p o r a t e s a n u m b e r o f k e ytechnologies such as multi-antennaenhancement, MU-MIMO, and multipointjoint coordinated transmission.Through the use of CoMP technologyin the solution, throughput on the edgeis dramatically increased.April 2011ZTE TECHNOLOGIES27

News BriefPartners ZTE and KPN MobileInternational Announce LTE Trials17 February2011, Barcelona― ZTE and KPNtoday announced ajoint developmentp r o g r a m m efocused on theapplication ofLTE technologyin Germany and Belgium. KPN Mobile Internationaland ZTE have scheduled a field trial program for 2011to investigate the capabilities of ZTE’s commercialequipment. The cooperation gives KPN the flexibility tospeedily upgrade its network equipment to LTE in thefuture, if demand is there.The 2010 spectrum auction in Germany put LTEnetwork technology firmly on the agenda and gave KPNthe opportunity to further enhance its competitiveness inthe market.The E-Plus Group, China Mobile andZTE Collaborate for TD-LTE Field Trialin GermanyE-Plus Group, CMRI and ZTE have signed MoUon Mobile World Congress17 February 2011, Barcelona ― The E-Plus Group willlaunch a TD-LTE field trial in Germany in Q1 2011. The trial isbased on 2.6GHz spectrum that E-Plus acquired in the Germanspectrum auction. China Mobile, with its leading position andrich experience in the operation and maintenance of TDDnetworks, will provide technical support to this trial. ZTEwill provide base stations developed on the advanced SDRplatform and co-siting solution of LTE FDD/TD-LTE, which is abreakthrough in the industry.The E-Plus Group and ZTE agreed and scheduled a field trialprogram for 2011 consisting of several streams to investigatethe capabilities of ZTE’s commercial SDR equipment and bestutilization of the spectrum holdings of E-Plus in 1.8GHz, 2.1GHzand 2.6GHz, both TD-LTE and LTE FDD.ZTE Ranked Third Globally AmongLTE Infrastructure Vendors18 February 2011, Shenzhen ― ZTE announced that it isnow among the top three vendors in the LTE infrastructureindustry, according to a recently announced market trackerreport by Open Vista Consulting (OVC).According to the report dated February 12, 2011, ZTEhas achieved outstanding performance in the four categoriesof industrial contribution, market competitiveness, productcompetitiveness and solution competitiveness. The resultenabled the company to become one of the top three LTEinfrastructure vendors across the world.ZTE to Build LTE/DC-HSPA+ NationalNetwork for Hutchison 3G Austria16 February 2011, Barcelona ― ZTE and Hutchison3G Austria have announced that ZTE will build anationwide LTE/DC-HSPA+ commercial network inAustria. This is an important breakthrough for ZTE’sGSM/UMTS/LTE products in Europe following ZTE’swireless network deployment in Germany and Belgiumwith KPN, its initiatives in Hungary and Montenegrowith Telenor, and also in Portugal with Optimus.Under the contract, ZTE will build a nationwidewireless access network, core network and bearernetwork for Hutchison 3G Austria to swap the operator’sexisting network infrastructure. The network is scheduledto be finished by 2011, which will cover 94% of thecountry’s population with HSPA+ services and provideLTE services in major cities. ZTE will also provideHutchison 3G Austria managed services for six years.28ZTE TECHNOLOGIES April 2011

ZTE Announces 2010 Annual ResultsSales surge 50% in US and EuropeCloud Computing and Integrated Circuit strategy to be key in 201117 March 2011, Hong Kong ― ZTECorporation (“ZTE”) today announcedits annual results for the year ended 31December 2010.Based on HKFRS and PRC ASBEs,ZTE recorded revenue of RMB70.264billion (USD10.609 billion) in 2010,representing an increase of 21% (inUSD rate) against 2009. Net profit wasRMB3.250 billion (USD490.74 million),representing an increase of 32.22%compared with 2009. Basic earnings pershare were RMB1.17 (USD0.177).The Board of Directors recommendedpayment of a final dividend for the yearended 2010: Abonus issue of twoshares for every 10shares held and acash dividend ofRMB3 (USD0.45)(before tax) forevery 10 shares.D u r i n gt h e y e a r , t h eGroup’s revenuefrom domestico p e r a t i o n samounted to RMB32.198 billion(USD4.861 billion), representing year-onyeargrowth of 5.90%.This increase can be attributed toexpansion of the 3G markets and ZTE’sleading position in terms of CDMAand WCDMA market share. ZTE alsogained 50% growth in the governmentand enterprise network markets whichfurther enhances the Group’s domesticmarket share. The Group’s revenue fromits international operations grew 27.45%to RMB38.066 billion (USD5.747billion) and accounted for 54.18% of totaloperating revenue.ZTE LaunchesWorld’s Fastest3G USB Modem inGreece8 March 2011, Shenzhen ―ZTE, along with COSMOTE, theleading mobile operator in Greece,today has launched the world’sfastest 3G dual carrier HSPA+USB modem in Greece.T h e M F 6 8 0 i s a s u p e rh i g h - p e r f o r m a n c e m o d e mthat brings the speed of 3Gdata communications closert o t h e r e q u i r e m e n t s o f 4 Gnetworks (known as LTE), withdownload and upload speedsof up to 42Mbps and 5.76Mbpsrespectively.The MF680 has been especiallydesigned for HSPA+ networks,providing users with an extremelypowerful mobile broadbandexperience. This stylish deviceallows COSMOTE customersto enjoy high-speed mobilebroadband wherever the networkis ready.Tiscali Chose ZTE to Develop Its IMS Network24 February 2011, Shenzhen ―ZTE has announced the signing ofan agreement with Tiscali for thedevelopment of an IMS network,a platform that can improve themultimedia functionalities of IP servicesand is compliant with every networktechnology. ZTE and Tiscali plan thelaunch of the first three commercial sitesin Cagliari, Roma and Milano by theend of May and the migration of Tiscalisubscribers to the new IMS platform bythe end of the year.ZTE will install a single platformin place of the two platforms currentlyutilised by Tiscali. By implementingthe ZTE solution, Tiscali will make itsnetwork management easier and moreefficient, reducing energy consumptionand optimising operational costs.MF680April 2011ZTE TECHNOLOGIES29

30ZTE TECHNOLOGIES April 2011